Stop Run Reversal Followed by Reversal Candle Formation 06/10/2010
In this chart we have a example of a stop run reversal day trade during news. Because of this setup occurring right after news we did not take it, however if you had it wold have at least given 15-20 pips initially. However the market worked its way back down to this support level again. As you can see the support level (Black Line) is drawn at the candle bodies and not the wick. As long as the candle bodies do not close below this level I consider this support level to still be holding. Additionally this is the level at which the Bank of Japan (BOJ) intervened a few weeks back. This week however they let the price slide through. In the chart you will see a reversal candle pattern that formed at this support level. Once this 15M candle closed we went long. There were opportunities to close this for a profit but officially I closed with a -20 pip loss. Even the best setups break down from time to time, but it is important to stick with what has proven itself over months and years as we saw on the following day.