Does it pay to Jump the gun? In most cases, No. Though there are times it is profitable, it is not highly probable. Catching the few cents or points ahead of the breakout or breakdown is not worth the risk that it entails. When entering a trade around a specific candlestick or pattern formation, it is in your best interest to wait for the breakout above or below the pattern such as a hammer before entering the trade.

In the case of Wednesday’s candle formation, if you did go long in the morning, don’t worry, that’s perfectly okay, just make sure to have your risk defined, that is, “a stop below the low of the tail.” Before taking any trade you MUST, MUST, MUST define your entry price, stop price, and profit target. This alone will greatly increase your probability of success.