Today’s trade was an Oil Jan. contract with a sell order from a price of 55.95. The price had been moving in a downward trend since the Moving Average blue line crossed the red line as denoted by the yellow X.
Once the trend had crossed to downward, we would be looking for a point to enter the market. As the price moved along the major support/resistance level of the white line at a price of 56.00, it started to move back upwards to the Moving Average blue line. The yellow circled red bar is our entry point as it has a high topside wick that tested the Moving Average blue line and is reversing the mini-trend of previous two bars.
Once in the trade we would move our buy stop order down to the top of each bar as it closed to lock in as much profit as possible as the price moved downward so quickly. That would have us stopped out at a price of 54.20 with the small yellow line or we could have exited the trade once we saw that the price was moving sideways along the major support/resistance level of the white line at a price of 54.00.
That would give us a profit of $1950, in a single trade with a single contract!