Thursday, April 26, 2007

20070426 - MMM - 15mins - Loss

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Symbol: MMM
Type: Long
Entry: The end of the 6th bar
Exit: Stopped-out at the bottom of the 8th bar
Result: Lost -0.78%

So did I spot the correct set-up or not? Immediately seeing the Hammer-type candle on the 5th bar, I started to prepare for an entry. As I witnessed how the 5th closed strong above the Opening Bar High, I took that as a confirmation that this will be a strong set-up. I entered Long immediately, and place my Protective Stop at the (rising) 5eMA at that moment.

What happened next just puzzled me. A full 'down' bar on the 7th, and the momentum continued on the 8th bar, triggering my Protective-stop. I thought.. that's fine if this is how it's headed. But I was wrong. Prices did bounce back and head steadily towards the 119% Fib. Extension. Although it didn't really hit the 119% level, who I would eventually have to find a place to exit, it would still be better off than the lost I incurred, so fast, so soon!

I have to admit that maybe my Stop was set at a tick too high. Had I set my Stop at the 6th bar low, I would have been totally fine.

So does anyone what had happened in the first 6 bars that led to that crazy 7th bar?

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