Our Metastock trigger with AnneMarieTrades for a swing short setting up has presented the opportunity for an entry swing short on the horizon.
The Metastock trigger tells us that we are likely to have resistance ahead of us so engaging in the trade short means that we must wait for the bounce back into 3006 to fail. This gives us a significant heads up.
There are a couple of warning signals that tell us that a swing short with size is not a good idea but one we should add to as the rhythm cycle confirms. Those signals (or lack thereof) comes from looking at the other charts of interest and not seeing them confirm weakness.
For me, the trade is the following –
First entry for this swing short is at the failed retest of 3006.5 with the chance that the chart could expand into 3014.75 so the stop will be a bit wide which will make our initial size small. We should easily see a fade at the 3014 level and if it does not lose 3006 within a couple of days, I will close the trade as it will let me know that more upside is possible and I will remove myself from the risk. I will reengage if the charts give me another setup if I am stopped out and will blog post this event
Here are the charts of interest to me