|
PureBytes Links
Trading Reference Links
|
Continuing my bo8z trade (long, 1 @ 2419 and 1 @ 2430)...
today's action indicates buyer/seller stalemate to me, after a return
to the 2500 inverse h/s neckline. It looks like a a swing high has
been established here with somewhat high probability. I've considered
a few options:
1. Keep a deep stop, around 2350, and give it room. Theory is it's
now in an upsloping range of width ~150 (highest probability), but
also has significant probability (15%?) of moving quickly a little
(50-75 pts) to alot (100-150) higher. Don't miss it by exiting,
and if it doesn't happen now, wait through the next cycle and
hope it's shallow.
2. Same reasoning, but consider the third possibility: we are
initiating a longer term lateral range or even regrouping for
another charge down to at least test the lows around 2300.
Hence, take profit now, reenter a single contract immediately
after a significant break of 2500, else wait to reenter long
after the next swing low is formed. If 2500 is broken, look to
get in a second position on the first pullback (which may be
all the way back to the neckline).
I've decided on option 2, and I've decided to market sell and take what
should be about $440 in profit. I'm trading off 25-45 pts of profit
if the market jumps up in order to lock roughly about the same amount
of profit. And I have the advantage of having higher probability
entries coming at me downstream, whether this market moves up or down.
It's interesting, as long as the basic move sizes are reasonably larger
than commission, one way of looking at trading is as an in/out dance
against your probability assessment. Long probability assessment today
in bo8z is marginal, so I'm exiting and waiting for a higher probability
setup. I'm only interested in long becase of the trend indicator.
(The idea of plotting with little dots the probability density of
different price ranges is interesting, as is the idea of that picture
changing as each new bar shows up. Anyone out there think that way?)
-k
|