But, and this is a good example, what of the two DP sells later in the day. Yes these turned out OK overall with a -1R loss followed by a +3.3R Profit (ignoring slippage and commission). However when DP’s are clearly “against” the larger degree trend they have a habit of “creeping”, in other words you can get multiple DP’s that fail. That is why the DP should only be used when you have confirmation of the larger degree trend particularly that you are at larger degree support or resistance. The reason for this is that the DP’s are “trend termination” setups and not “trend continuation” setups, so care is needed with them.
Steve
Steve
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