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After getting whip-sawed in my day trading last week as the spoo thrashed
around, I'm having an interesting time position trading some stuff I've
never traded before. Basically, with position trades I'm using weekly for
trend, daily for pricing and 30-60 minute bars for entry. Unlike the spoo,
I'll leave these on a position trades with stops on all positions - entry
price, initial stop and initial price objective are calculated prior to
entry and the stops.
Short LC9J at 68375 with initial stop at 68975 and price objective of 65500.
Live cattle has been in a long uptrend since December and has recently twice
failed to make significant new highs so its looking tired and in need of a
correction. I'm trading the April contract because this is a short term
counter-trend trade. Had a bit of a problem entering the trade because LC
trades in 1/4 cent ticks but the pit accepts prices of 4 digits only so I
missed a fill at 68425 because I should have entered it as 6842 - go
figure! Of course the price immediately ran against me running quickly up to
68950 where it completed a double top and began to fall quickly. I was
amazed that my stop just 1 tick (a whole $10) was not taken out! As I
watched the price accelerate to upside, I was tempted to second guess my
stop and save myself a few dollars but I decided that I'd planned the trade
properly and should let the market take me out - turned out to be a good
lesson in not over-managing a trade as price fell back to 68250. Hard to
tell how this trade will turn out - I'm using half hour bars for entry and
it needs to get moving south or I'll scratch the trade.
Long GC9M at 29010 with initial stop at 28400 and initial price objective of
29800 with possible target around 31400. Gold has been in a long down trend
which appears to have based out with the beginning of a modest uptrend and
symmetrical triangles on both the daily and weekly charts. Also, the latest
COT reports showed the commercials heavily long gold. I'm trading the June
contract because I felt this trade could run beyond expiration of the
current front contract. This one moved quickly off the entry and I've been
able to adjust my stop upward twice.
Long BP9M at 16096 with initial stop at 16014 and initial price objective of
16286. British Pound has been in a very long consolidation near highs for a
long time, then recently broke down through trendline across this year's
lows and has an established short term downtrend on the weekly chart. This
is a countertrend trade to catch the retracement although the COT report
indicated that the commercials had moved heavily long providing an edge to
the trade. The June contract was the logical choice since March was
expiring. The first rally off the low on the daily looked solid with a pair
of NR7 days which caught my eye, also had noticed a very tight consolidation
on 30 minute chart between 16024 and 16096. I managed to diddle around while
entering my trade and missed getting my order in before it broke out above
16096 and quickly ran nearly 50 points. With an 82 point stop at my proposed
entry, I refused to chase it. I let the order sit hoping to catch a
retracement back to the breakout and my patience was rewarded by a fill just
2 ticks above the retracement low. BP has never looked back - each day has
demonstrated strong thrust with little retracement so I am now reevaluating
my price objective. I was able to adjust my stop upward a couple of hours
after entry and again this morning however with such a strong performance
I'm giving it plenty of room although I'm not forgetting that this is a
counter trend trade.
Earl
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