Yet another example of a BS2 occurred during stock trading of ICE, Intercontinental Exchange, Inc. The stock trader noticed ICE during an online scan of about 200 stocks frequently traded. On the 15-minute chart, Intercontinental Exchange, Inc. gapped higher from the previous close. The stock fell and put in it’s first pivot. Trading was then followed by three higher lows. This signaled the stock trader to watch for a trigger candlestick bar making a lower low. When this trading action occurred, the stock was shorted. A trader could choose either a stop at points 1 or 2 depending on the reward to risk they want to take. The stock trader choice the lower pivot. The difference between the entry and stop was around .35. The online trader was looking for a 2R target or .70.
The trading in the stock of Intercontinental Exchange, Inc. resumed lower. The stock trader was able to successfuly cover the stock using his online broker.
An interesting second confirmation happened in trading on the 5-minute candlestick chart. A Bear short 3, BS3 happened. Notice the base. A short could be placed below the first pivot low and a stop set at either point 1 or 2. That depends on time of day, market direction to some extent, and reward to risk criteria.
