The second option for an entry would have been on the first pullback
after the 12145 swing high was taken out. In this case, the Dow contract
pulled back and held near a coincidence of a .786 retracement back to the
prior low along with the 100 percent projection of the prior swing down at
the 12132–12134 area. Anywhere from a .50 to a.786 retracement would be
a place to look for an entry. The initial stop in this case can be placed just
below the 12127 swing low. Let’s say you took an entry around the .618
retracement back to the prior low at the 12137 level and your stop is at
12126. The initial risk is then around 11 points, or about half that of the first
entry option. Note that stop-loss orders are not always filled at the exact
price, so your risk could actually be a bit higher in that case.