A trader explains how to enter a sell stop trade when price drops on low volume with no follow-through. Entry near the wick low, stop just below it, targeting 40 points while risking 15 points overnight before market open.
This is A+ setup. When I see something like this, I want to put a sell stop right here to go aggressive because this can actually liquidate down. What I was looking for is price to come down and really lack follow-through on the downside. Okay, and come back in the range. If this really falls, I don't want to get aggressive with that. It could really, really like dump down. Yeah, I wanted to see it come down and reclaim that zone and see what happens. We broke under, we created the wick. This is a lack of follow-through to me. Yeah, 700 negative Delta. We broke under, so more selling came in, but price is not going down, so some new buying came in. This is where I would enter. I would put a stop just below this wick low, so I'm just targeting that I would sell at the high and I would trail it. Get in here. Look at the squeeze. Look in the low volume node. Look at the cluster build out. You're out at the highs, 40 points, risking 15 overnight. You're done your day even before the market opens.
