The afternoon trading followed a similar pattern as the early A.M. We see price had extended higher by the bulls, stalled and returned to the 20EMA. Bars 40 to the entry bar were showing a resistance around 1542. The thought was we were likely to see another move lower, and a short was entered below the resistance level.
There will be three parts to any entry: The entry itself, the target and the protective stop. The stop placement is considered to be optimal if it is in or near a perceived support/resistance level. You may need to take some "heat" if your entry is away from that S/R level, but this type of stop will tend to let the trade work. Too often it seems people complain about a stop out only to watch their trade work (from the side line). The target is a personal choice, but I will look for prior pushes to gauge the likely range price will run.
In the second trade today, price would likely test the low, and 1543+/- was the target. If you get your target, look for the next trade. Don't get hung up on price running beyond your target. Your objective is to go for lower risk quality trades, not trades that try to squeeze out every tick..
The last trade of the day was another break down in price after the bull stalled. Albeit the entry took some heat, the stop was at a prior resistance and gave breath to let the trade work. The target was a low test, then adjusted for a break of the more recent low of bar 76. It was near the end of the day, and the target range was narrowed.
overall, a nice day trading the failed bulls since selling (bear bias) was deemed to be the quicker and more productive trade for today's action.
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