W5 Continuation

[JayF]

Looks like a great W5 continuation... let's see how this holds out.

[JayF]

Seems to be valid. Here's an extra MOB to show another break.

[JayF]

[JayF]

This turned out to be a good lesson in money management for me. I'll review my trades to better illustrate.

Upon the break of the MOB, Pivot Point (PP), and flat side of the Ascending Triangle, I got in long 3 contracts at 1056. I then placed a limit order to sell 2 contracts at 1056.75 and a stop at 1054.50. The limit was set as a break even point, where no matter what happened, if the price was to reach 1056.75 I would effectively be in a risk free trade (minus commission.) My plan was to ride up any W5 (hoping for a W3 relabel), and exiting on a major trend line break or LSMA (least square moving average, dark blue line) cross.

When my break-even limit was filled, the pressure was off as was now in a risk-free trade. Essentially, the small profit I made from the 2 contracts was now covering any potential losses from being stopped out. At 1057, the trend reversed and crossed the blue line (here's where my mistake was.) Instead of going with my established plan of exiting at an LSMA cross, I stayed in my risk-free trade thinking it was just a retracement. Later the downtrend broke the 34 EMA, and also the previous former resistance line. That woke me up, and exited at 1055 at a very slight profit after commissions.

Lesson learned...