Here’s what happened to me.
I thought KG was making a HUGE run up and I was eager to short it and make a fortune.
I thought the move was over.
On the 1″ chart below, I thought I saw a shooting star pattern with bearish confirmation. I thought criteria for a short entry were in.
WRONG!
I made a decision based on a candle that hadn’t finished forming. If you look at the 1″ chart, after the printing of bearish doji there is as spinning top with a long wick. That spinning top indeed looked like bearish confirmation of the doji but the candle had not finished forming.
By the time the candle completed forming, we can see we did not have bearish confirmation. All we had was a spinning top.
Furthermore, putting on Fibonacci it becomes obvious that I shorted 50% retracement which as you can see held as support for the spinning top and near-dragonfly that followed.
That near dragonfly functioned quite hammer-like and as you can see bears gave up after seeing that printed.
I can’t help but think I am not the only onen looking at the 1 minute chart.
Biggest mistake here was not to draw the Fibs right away once doji was in.
If you look at the 5″ you can see the move was fast. The spinning top after the long bullish candle marked not only the high of 12.22 but also the 50% retracement within the same candle. So the retracement occured within three (3) minutes.
It all boils down to one thing. There was no candlestick reversal pattern. There was no dark cloud or bullish engulfing confirmation of the one minute doji following the bullish marubozu. What I thought was a doji on the 5″ was more like a neutral ’spinning top’. Bearish tweezers on the one minute was in and of itself no reason to reverse. That was just the 38.2% Fibonacci support being retested. On the 5″ SMA(9) came up to provide additional support for a bullish case.
Bottom line, considering MAs, Fibs and candlesticks, there was no case for the short which I took.
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