Recap: NWSA

See this trade on my tradervue.com trading journal.

NWSA 5min
A nice beyond the opening range high setup -- buy above 14th setup bar. This particular variation of the setup [pb-btorh] hasn't worked as well in the recent past (sharp and shallow pullback to the opening range high), but it also had a unique pattern that I call the "3 bar reversal" [3br]. So I ranked it a B grade and took it.

CONCERNS:
One concern was the steep retracement of the 2nd swing that went below .618 level, although that was supported by the 5ema. Another concern was that the pullback just prior to the setup bar was shallow.

THE 3 BAR REVERSAL:
But the reason why this worked well is due to what I call a textbook "3 bar reversal." Trader-X had briefly mentioned liking to see failed bars similar to this in his archives.
a) 1st bar is a red shooting star/inverse hammer candle at swing high
b) Shorts enter below break the low of that 1st bar
c) 2nd bar is a green hammer, and makes the shorts nervous
d) 3rd bar breaks above the high of the 2nd bar. Shorts exit and longs enter

Note how the 3rd bar also ended up being a green hammer, confirming that this trade has a good probability of working.

EXIT:
Scaled out when it got nearly to the FE 1.168 level, as well as the last half when it broke beyond that level and came back. However, I left some money behind by not letting the trade run. It took nearly a couple hours of chop and consolidation to get to 16.50, so I'm not sure if it would have been worth the wait.

NOTES:
Trader-X took an earlier trade in NWS today and posted it on his website.