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Does anyone know why bar 71 is not a good major trend reversal buy setup? I know it’s a possible bear channel and buying high in a trading range but there was a trendline break, bulls put bar above MA, and micro wedge.
Hi Charles, its not the worse swing entry, by evidence of the bar 75 buy setup, but it is a PB from the reversal down from the Wedge at the EMA. Wedge reversals often have traps that move in the original direction. Also, the trendline break was a break of a fairly tight channel. A broader channel forming was more likely than a MTR forming.
You mentioned the TR and Bear channel, but there was also the EMA, Open of the day, and test of the BO point of Opening Range that acted as magnets. All these magnets meant a test of the wedge reversal was likely. Tests also often act as traps.
- Thanks for the insight I really appreciate it!
