looks to be setting up for a nice risk:reward swing trade in the form of a SP
(Spring). Looking to re-test the high at TOD (Test of Demand). CDK
is showing a re-accumulation Wyckoff pattern. The spring is a more aggressive entry, but the risk:reward is generally better on these more aggressive entries (especially when the trading range between TOD and SC
is wide, as it is on CDK
). The real money in the market is made at the extremes. Some would say these entries are the higher risk trades (we are buying a new low), I think the opposite. Why? Because, these trades are the better risk:reward setups, and they have clear levels that tell us when we are wrong (cut our losers early, let our winners run). Trading is about personality. Does your personality favor high win % (therefore smaller R:R) or lower win % (and the associated higher R:R)? Overall, successful trading is about +EV (which is the combination of win % and R:R).Both personalities can be +EV. Unfortunately, most traders only think about win %, and not EV
as it relates to R:R, which ultimately leads to -EV strategies. Good trading all.