When I see a small bearish candle on low volume, my first thought is always, “Nobody’s selling—it’s still going up.” I used to think that way too.
Later, I backtested this pattern on its own. When a candle like this appears during a 4-hour rise, the price actually pulls back more often afterward—the opposite of what the textbooks say. $PAXG looks just like that right now: 73.4% of accounts across the market are long, with retail traders piling in on the bullish side, but open interest has fallen 11.07% in 24 hours, suggesting some traders are taking profits and closing out. Meanwhile, the taker buy/sell ratio over the past 6 hours is 1.558, so buyers are pushing pretty aggressively. Sentiment is rising on one hand, while positions are being closed on the other.
So I’m taking the opposite side and going short. I’m placing a limit order at 4185.15, with a stop loss at 4207.6 (+0.5%) and a target at 4151.47 (-0.8%). The risk/reward ratio is 1:1.5, and I’ll hold for no more than 8 days. Backtests show an average of +0.08R, and 18 simulated live trades totaled +3.9R. It’s nothing spectacular, but sticking to the rules gives me peace of mind.
Are you leaning long or short at this level?
#PAXG #FuturesTrading
This is a personal trading record only and does not constitute investment advice.
Later, I backtested this pattern on its own. When a candle like this appears during a 4-hour rise, the price actually pulls back more often afterward—the opposite of what the textbooks say. $PAXG looks just like that right now: 73.4% of accounts across the market are long, with retail traders piling in on the bullish side, but open interest has fallen 11.07% in 24 hours, suggesting some traders are taking profits and closing out. Meanwhile, the taker buy/sell ratio over the past 6 hours is 1.558, so buyers are pushing pretty aggressively. Sentiment is rising on one hand, while positions are being closed on the other.
So I’m taking the opposite side and going short. I’m placing a limit order at 4185.15, with a stop loss at 4207.6 (+0.5%) and a target at 4151.47 (-0.8%). The risk/reward ratio is 1:1.5, and I’ll hold for no more than 8 days. Backtests show an average of +0.08R, and 18 simulated live trades totaled +3.9R. It’s nothing spectacular, but sticking to the rules gives me peace of mind.
Are you leaning long or short at this level?
#PAXG #FuturesTrading
This is a personal trading record only and does not constitute investment advice.