1.) What did I see?
A gap up and first three bars somewhat wide-range and green. The fourth bar narrows and forms a "hammer-like" candle, closing above the opening range high.
2.) What is the entry?
A break of the fourth bar high.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's low to the opening range high. It was not hit as price reversed strongly on the eighth bar. I closed the position when the eighth bar took out the seventh bar low. This is one of the advantages of having fewer positions - you can monitor them better. The seventh bar was wide range with upper and lower tails/wicks indicating indecision - an early sign that there could be trouble with this move. So, I was prepared when the eighth bar collapsed. As a result, I made enough to cover the cost of the trade.
Hindsight analysis - was this really a good set-up? Looking back, the high upper tail/wick on the second candle should have given me pause, as sellers came in and drove price back down. The upper tails/wicks continued in the third, fifth, sixth, and seventh bars even as price was making new highs. In retrospect, there were probably better set-ups out there!
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