The newest EJ candle has formed a candle that looks alot like another classic reversal candle. When a candle opens BELOW the close of the previous day and then closes more than half way up through previous day candle THEN it is called a piercing candle. The candle that was just formed did not actually open below the close of yesterday's candle, so it is technically not a piercing candle. However, I think that it is so close that is may be perceived and treated as a piercing candle.
Being that it is not actually a piercing candle I am not buying it at market price. Rather I am looking for the candle to 'prove' itself by placing a buy stop somewhat above the highs of the last two candles. I am using a 'buffer' that is about the distance of the ATR(14)/10 which equals about 16 plus the spread of 4. I know this sounds a technical and stuff but really its just a way of finding a comfortable 'buffer' distance for my buy stop. I am also using a SL based on the ATR(14) so my stop is 160 pips and the lot size has been adjusted so that I am comfortable with the risk to my account.
This is not a trade recommendation. Should you decide to trade be sure to use risk management or use a demo account.
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