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Thursday, December 29, 2005

TWP - 122905

1.) What did I see?
A gap up and wide-range first bar. The second bar is narrow range, an inside bar, and forms a "hammer like" candle.
2.) What is the entry?
A break of the second bar high.
3.) What is the exit?
The Fibonacci extension of the previous day's low to the opening range high. It was hit just before 1:00.

Notes - as with the MFLX trade, you might have been tempted to close the position after the weak fourth bar. But, that bar's low was never broken, and the stop was never hit (the low of the entry bar (second bar)). You would have missed another good trade by bailing out prematurely.

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