Trade of the Day


Today’s trade was an Oil Jan. contract with a sell order from a price of 47.16.  The price had been moving in an overall downwards trend as it moved along the major support/resistance level of the white line at a price of 47.50 towards the next major support/resistance level of the white line at a price of 47.00 until it moved back towards the Moving Average blue line.

The yellow circled red bar is our sell signal as that bar closed at its low and it is reversing the mini-trend of the previous three bars and the price had not broken the resistance of the Parabolic SAR green triangles above the price.  We would place a sell stop order just below that bar to enter the market at a price of 47.16.

Once in the trade we would first look for the price to reach the obvious price target of the major support/resistance level of the white line at a price of 47.00, which is did immediately as it almost reached the next obvious price target of the major support/resistance level of the white line at a price of 46.50.

Since the price had smashed through the previous low at a price of 47.90 we would want to have our stop loss order to lock in profit follow each bar as it closed until it finally reached the major support/resistance level of the white line at a price of 46.00.  At that point the price started to consolidate along that level and as the price converged with the Parabolic SAR green triangles, we would look to exit the trade somewhere in the yellow oval.

That would give us a profit of $1150!

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