YM on Jul 23 part 2

So the question was whether to take this DP sell or not ? On the surface this was a good looking DP as it was on a high volume (VSA) bar as well as stochastic divergence. BUT, and here is the big question, it was “against” the larger degree up trend. So my normal advice is to be very carefully (particularly on DP’s) when they are “against” the larger degree trend.....

The only thing that it had going for it was that it was towards the end of the day, on a day where there was a big up move in the morning, so it would be natural for some “profit taking” to come in and push the market lower towards the end of the day.

So my advice would be to avoid trades that are “against” the larger degree trend, and then and only if you are an advanced trader should you consider them. But even if you do, protect yourself quicker as you know you are against the larger degree trend. In this example it would have probably been a break-even trade anyway as the 100% initial risk was just reached. So (in this example) it did not really matter whether you passed on the trade, or took it and got stopped out for break-even.

Thanks

Steve