Sive Morten
Special Consultant to the FPA
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Hey Sive
Could this be another scenario where we can apply the "scale in" method? Take a look at my chart below.
Market has broken through 4hr k-support with little respect. After this break, market is now gradually retracing back up to the 4hr k-support that was disrespected.
Could we apply the scale in method here where we wait for price action to retrace back to the k-support and then enter short? This will be the 3/8 retracemenet of current swing down, and also WPP.
I understand that we have possible B&B here on the daily TF with minimum target at 1.3031 so all SL will be above that level.
I am just not quite sure if current market situation is applicable with the scaling in method.
Thanks, Sive!
View attachment 7668
Hi Beekay8
When you apply scale-in - your risk should not become greater. As you've said about "scale", hence, you should already have some part of your position. So, applying scale in in current situation probably will demand to move stop on your first entry on b/e or even better, so that potential loss (if market will complete B&B) will not be greater than on first position. Speaking shortly any scale-in is acceptable, if it increase probably of profit and do not increase your total risk. You can get an example of step-by-step risk calculation within scale-in in our FMS.
Speaking about entry context - well, why not? That could be working trading plan. It could turn so, that market will show just spike up to 1.3030, but major price actioin will coil around 3/8 resistance. And second shoulder of H&S will be formed. Who knows...
Still, as far as it possible - confirm scaling by patterns on lower time frames around desirable levels. But this is not always possible.