Now that we have covered the concept of support i will get back to unanswered question.
You saw a supply zone and price was approaching it after 30 min breakout bar.
you want to go short.
how would you go about it?
first of remember i sell double tops on second test when first tests have bearish engulfing.which in this case it isn't the bar marked by dark blue arrow in magenta circle was never broken by that black bearish bar.
Assuming even then you want to sell ,why would you just sell at base of engulfing bar,i have already said i never sell at base of engulfing bar,because if trend is strong bar high lows never break.
what if you were wrong and price never broke the trend will just continue.
In any case going by the rules i have laid out it can only be played as a support/resistance see that post.you would let price drop to the base then wait for price to rise second test the same high,then sell if you feel good pattern,but i wont sell it until i see atleast a bearish engulfing,which was not there,i normally sell third test if i see good pattern and price reaching same lows.
Anyways in magenta circle unfortunately i wont trade,neither it is forming good engulfing bars nor it formed good pattern on second test,and the third test never even happened.
As silly as it is that pathetic (support category)resistance resolved down stairs,then it got rejected and resumed trend,now this is where it gets interesting as price approached the red circled area,i have already forgotten about the (support category)resistance in the magenta circle, i am looking for weakness and new resistance formation (read my post about failed support)
then do you see two black bars dropping in the red circle i would sell at second black bar close,with stop at the black arrow.
second test after failed supports are tricky but you are just taking a chance on second test after rejection,if you find any weakness,which i did in terms of two black bars going down in red circle.
Now i maybe wrong when i take this trade,and my stoploss at black arrow maybe in danger at red circle,so i will close the trade manually if a bull bar takes out the highest point in red circle,you getting me??
means i did risk on second test know that first resistance had failed but i risked full stop loss at black arrow by keeping finger on close button manually,i will not take full stop out if i see the two black bars in red circle are blown away by bullish bar.
I call this technique active trading,you set full stop loss ,but you kill trade yourself when you see signs of weakness against your trade.
I repeat i will not hesitate to close at a loss if the highest point in the red circle is blown away.
And if after i close trade,it did blow away that highest point in red circle and not hit the black arrow stop loss ,i will not curse the market for tricking me into entering,i will not get angry and take a stupid position,i will move on.
A tip most of the time.
A breakout bar always reverses either as fast move.
Or as support move (read that post)
And what you call a complex pullback is just the support resolved and trend reinforcing.
A tip,when trading mark high lows of supports with line tool,so when they resolve you know that it has resolved and you don't think it is some freak move,and when price does come back in the same area as support,take it as a fresh move instead of same support.
Rest you have to spot these patterns i mentioned,and get screen time,go ahead and check what i say is pretty much universal.
price does behave that way.