Strategic Sell Setup for Lupin: Precision Trading with Defined R
In this Lupin sell trade setup, we are employing a systematic approach that ensures we trade based on a clear structure:
Identifying Key Levels:
The first step is to recognize a candle that has closed above the all-time high. This candle is crucial as it marks a potential exhaustion point or a possible reversal zone.
Confirmation with Consecutive Candles:
After spotting the all-time high candle, we need to confirm the market's bearish movement. The next two consecutive candles should close below each other, signaling that resistance is strong and the stock price is likely to move down.
Establishing Resistance:
The third key point is the confirmation of resistance. The downward pattern in candle closings suggests that selling pressure is increasing and resistance is solidifying. This signals a good opportunity to plan the trade.
Executing the Trade:
Finally, execute the sell trade based on the rules set in the strategy. This includes placing a stop-loss (27.65) and targeting a reward-to-risk ratio of at least 5:1. In this case, the target is 138.50 with an impressive reward-to-risk ratio of 5.01, ensuring the trade offers substantial profit potential compared to the risk.
This setup not only provides a clear structure for entry but also incorporates a solid risk management plan, making it a robust strategy for traders looking to capitalize on short opportunities in Lupin.
Identifying Key Levels:
The first step is to recognize a candle that has closed above the all-time high. This candle is crucial as it marks a potential exhaustion point or a possible reversal zone.
Confirmation with Consecutive Candles:
After spotting the all-time high candle, we need to confirm the market's bearish movement. The next two consecutive candles should close below each other, signaling that resistance is strong and the stock price is likely to move down.
Establishing Resistance:
The third key point is the confirmation of resistance. The downward pattern in candle closings suggests that selling pressure is increasing and resistance is solidifying. This signals a good opportunity to plan the trade.
Executing the Trade:
Finally, execute the sell trade based on the rules set in the strategy. This includes placing a stop-loss (27.65) and targeting a reward-to-risk ratio of at least 5:1. In this case, the target is 138.50 with an impressive reward-to-risk ratio of 5.01, ensuring the trade offers substantial profit potential compared to the risk.
This setup not only provides a clear structure for entry but also incorporates a solid risk management plan, making it a robust strategy for traders looking to capitalize on short opportunities in Lupin.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.