Top Pick Trading Forum

This was a 2nd entry long failure that I took on the $NQ. I'm wondering what finer details I might be failing to notice with regard to why the setup did not work and went on to stop me out by a tick before going back in my direction. (Which made for a nice 2nd entry short that I reentered on.)

First, yes the bias is still downwards.

However, your signal bar is still a doji. This means that the top of the signal bar really isn't an area of rejection calling into question the stop placement.

This is a important point. Stop losses are placed where "one is wrong". Poor signal bars then do not well indicate areas where one side has created a bias. Often lower highs, or higher lows, where rejection has been shown to initiate a move is what is observed. Not simply counting.

There is a common refrain that says the signal bar doesn't matter with failures and traps. Stop placement, as well as context are the variables that are influenced and why failures need additional experience.

As you move through many examples note these aspects, and where setting stops at the appropriate highs and lows has effect.

Thank you Eric for your valuable insight