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Hi everyone,
I saw 2 consecutive big bull bars with one closing on its high (bar 1 and bar 2). I tried to enter above bar 2, but bar 3 went above bar 2 only in the last few seconds of bar 3 and ended up closing as a bear bar. I waited for more PA and bar 4 seemed like good follow through, so I entered above bar 4. I held through bar 5.
However, I noticed that there was price rejection around EMA and market formed a big bear bar 6. My initial stop was below bar 1, but I saw this big opposite move that I thought was uncharacteristic given the big bull bars and the recent PA. I thought there might be an opening reversal playing out.
So, I exited below bar 6.
1) Is this reasonable to do? Or, did I just move make my stop a skunk stop?
2) What are some other ways to manage this trade beyond scaling in?
3) When does it make sense to hold stop and when does it make sense to get out?
4) If you were to get out of this trade, where would you get out? If you would continue to hold, what are the reasons?
