Price broke Moving average --> Support becomes Resistance --> $740 in profits
5 Minutes Nasdaq 100 Candlestick Chart
Dear Trader,
How's going lately? There is a classic breakdown pattern today. First there is a double top ( in green circle) then price began to fall, I shorted 1 contract at 1505 with my stop loss at 1511. Then at 13:10, price broke the 150 moving average. This was a crucial point. If it rebound, I will exit my position and go long, However if it broke even further, it means that price is moving down and the 150 moving average which was originally a support level had become a resistance level. Price tested the 150 moving average for a while, doji candlestick appeared and I knew it was going furhter down. I shorted another 2 contract at 1498. There was no knowing where price will stop, i expected it to retrace all that was gained from yesterday's movement. At 14:00, there were signs that momentum is weakening and the plunge is going to end soon, at 14:20, I exited at 1488 with $740 in profits.