Trade Diary - Sell Failure Trade on Silver on 5th Jul, 2024

On Jul 3, 2024, Silver broke out from a 1-2-3 bottom turning bullish on the daily and weekly charts (Ref Fig 1.1 below). The next day was an inside Narrow Range candle indicating a big move in the same direction. The next day, on the 5th of July, Silver gave the perfect opportunity on C5 (2H candle from 5 to 7 pm) (Ref Fig 1.2 below). The candles had the characteristics of 3 Bullish setups

1. Bullish Engulfing (Bullish Setup 1 )

2. Hammer (Bullish Setup 2)

3. Outside Strong Green (Bullish Setup 4)

Additionally, the long lower wick went before previous day support but closed very strong above the day's resistance. This is what we typically describe as a sell failure, a trap for the bears.

A perfect signal after a strong Bullish breakout, this signal had all the makings of a winner!

(Fig 1.1 - Breakout from a 1-2-3 bottom pattern on Jul 3 on the daily chart of Silver Micro Futures)

(Fig 1.2 - Big Bullish Engulfing setup on Jul 5 that is also a sell failure on 2H chart of Silver Micro Futures)