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Wednesday we got a bullish engulfing pattern but it closed right at resistance, which is why I was bearish going into today. Was that technically the right decision? By that I mean, did I get lucky or is that something I should look at more often. And what is stronger, a bearish candle closing at support or a bullish candle closing at resistance? Or should I just wait for confirmation on both if I want a less risky play? Sorry for the thousand questions  |
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I might be more conservative but I reckon you'll end up shooting yourself in the foot if you go into a day with a pre-conceived notion of what the market will do. On the NQ daily you posted up the bearish engulfing pattern is at the top of a up trend so it is a very valid signal for a reversal, and it does close at support.
However, I would personally still be reluctant to go on into the next day thinking that it must come down more cause the candle says so. A safe play would be to watch the open and then place a limit trade a few ticks below the support level of the uptrend and see if that's taken out.