Price has dropped to a support zone and formed a bullish kangaroo tail on the zone. To be on the safe side, a buy stop is placed a few pips above the kangaroo tail & a stop loss a few pips below the kangaroo tail. Why?
Kangaroo tails signify exhaution of price or price has gone too far. If price is going up it will trigger the buy order and will never trigger the stop loss. If price triggers the stop loss then the signal was a false one and no loss taken
Kangaroo tails signify exhaution of price or price has gone too far. If price is going up it will trigger the buy order and will never trigger the stop loss. If price triggers the stop loss then the signal was a false one and no loss taken