We have the setup because:
- The price broke down the consolidation that we isolated
- The breakdown candle is red (colored by the Breakout Pivotal Bars)
- The bearish Sentiment Index breaks down its trendline at the same time
We set the stop loss rather close and we also stay on the aggressive side with the target level.
This is because we want the trade to be worthwhile which, to us, means to have at least a risk-reward ratio of 2.
Of course, we’ll balance the extra risk by trading safely and moving the stop loss to breakeven first, and then moving the breakeven even lower as the price goes down.