A trader warns against shorting round-out patterns on daily charts. These setups have a much lower win rate than other first-red-day patterns, even when the candle looks attractive. Skip them unless the red day shows real conviction.
There are many times like if I see this kind of round out to daily chart with this kind of volume, I almost will never trade it. And it doesn't mean that red day can't work. It doesn't mean at the end of it all this can't still have a really nice red day that's worth shorting. But more times than not, it's not worth it. The win rate on something like this, even though both are first red days, the win rate on a look like this will be significant lower than a win rate of a first red day that looks, you know, something like this.
