The session started with a strong bullish spike after a huge gap down from the overnight session. When prices reached the 20 EMA, the market reversed sharply. It formed two bearish legs down and found some support at the regular trading hour open, but that level didn’t hold, and the market then tested the current day’s low. I did not see any way to enter.

After prices bounced off the current day’s low, we got a strong leg up with a solid close above the EMA. I went long, betting that we were in a larger trading range and could at least get 1R on the trade. Prices stalled and had several sharp pullbacks while I was in the trade. Eventually, price pulled all the way back to the current day’s low. Since I believed there were still buyers defending that area, I added two more contracts around those lows instead of letting prices hit my stop loss.

This type of scaling in is more of an advanced Brooks-style technique, and I would never do this on my PA accounts as of now. I only tried it because I was trading the five evaluation accounts with micros. I ended up exiting the trade at pretty much breakeven — the premise for the trade was over for me, as I had entered expecting a reversal.

Note on Scaling In
What I’ve learned from Al Brooks is that on trades like this, I often have my stop loss at the previous swing low. Thinking about it, that area is actually a buy zone — meaning it’s very likely that bulls would enter there. So it’s not really a logical place for a stop loss. Of course, if the bears had made a clear breakout below that swing, the trade would have had to be exited. Still, I find it interesting that the spot I used to think was the best place for a stop loss is often where you can expect more traders coming in. Of course, this idea only makes sense when the context supports it.