I’ve got to admit that I’ve been hot lately and not had a losing day in weeks but today I ended the day down about 1/2 of a risk unit. Which means if my risk was $100 per trade I’d be down about $50. Not a bad losing day but I wanted to show you how this losing day could have been avoided. I took a 30 minute buy that triggered in CSCO, but I failed to notice that the 60 minute chart after 2 green bars to the upside closed with a red COG bar. After a red COG, a trader should be expecting another red bar lower, but there I was taking a 30 minute buy setup long. No need to guess what happened, it’s almost predictable, I was stopped out, Ouch! I’m sharing this because I’ve made a big deal about this in the past, under normal market conditions, we get 3-5 bars up and then 3-5 bars lower, so after a series of green bars and you finally get a red bar, you should be expecting another red bar until you have 3-5 lower bars. Sounds simple and it is…
