Today’s trade was an Oil Jan. contract with a sell order from a price of 53.80. The price had been moving in a sideways channel since it re-opened at 3:00 PST.
The yellow circled red bar is our entry point as it closed at it’s low, so we would place a sell stop order just below that bar at a price of 53.80. That bar also has the resistance of the major support/resistance level of the white line at a price of 54.00 where the price could not stay above.
The price had recently changed to a downward trend as denoted by the yellow X and the first chance to sell the market came shortly after but the price had the Parabolic SAR red triangles close below to stop a downward price break.
Once those Parabolic SAR red triangles were broken we now had the chance for a downward price move as we now had the Parabolic SAR green triangles above the price, close to the major support/resistance level of the white line at a price of 54.00.
Once the price spiked downward so quickly we would want to have a buy stop order ready to exit the trade at firstly the major support/resistance level of the white line at a price of 53.50 or at the next major support line at a price of 53.00.
That would give us a profit of at least $800.