DIXON Short Setup: Evening Star & Potential HNS with Trendline Weekly Analysis
Pattern Observed: Evening Star on Weekly Timeframe
Additional Insights
- The Evening Star pattern tends to be more reliable on Daily and Weekly timeframes, making this setup particularly noteworthy for swing traders.
Trade Setup
1. Entry: Enter after a decisive break below the low of the third (red) candle in the Evening Star pattern.
- Alternatively, you may enter on the fourth candle if it signals a reversal, with a stop loss set according to your risk tolerance.
2. Stop Loss (SL): Can be set based on your risk preference, usually just above the high of the Evening Star pattern.
3. Target (TGT): Consider scaling out at key support levels or use the measured HNS target as detailed below if the formation completes.
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Potential Head and Shoulders (HNS) Formation
Trade Setup for HNS Pattern:
1. Entry : Enter when price decisively breaks below the neckline on a closing basis.
2. Target (TGT): Measure the distance from the top of the head to the neckline and project it downwards from the neckline for your target.
3. Stop Loss (SL): Place the stop above the head of the HNS pattern.
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Additional Confirmation
I've drawn a trendline to monitor for a potential breakdown. If either the Evening Star or HNS pattern aligns with a trendline break, it would serve as an additional confirmation for a short position.
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This setup combines a confluence of technical factors, making it robust for weekly trading decisions. Comments and thoughts welcome!
IMPORTANT THINGS TO REMEMBER
1. Don't be fooled by opearators Theyll try it take it up to sell
2. Don't be a hero, follow SL with 1% extra loss max. (as setup is on Weekly TF)
