Today’s trade was an Oil Feb. contract with a sell order from a price of 47.99. The price had been making some wild swings, starting from one major support/resistance level of the white line at a price of 48.00, through the next at 47.50, down to 47.00 and all the way back up to 48.00.
The yellow circled red bar is our sell signal as that bar is reversing the mini-trend of the previous six bars that moved one whole dollar while also testing a previous high of 48.38 forming a double top. We would place a sell stop order from just below that bar to enter the market from a price of 47.99.
Once in the trade the first obvious price target is the major support/resistance level of the white line at a price of 47.50 and once that level was reached we would look to move our stop loss order to exit the trade down along the tops of each bar as they closed. The yellow circle also shows us that the price had tried to reach its previous lows but those long downside wicks signal to us that the price could not hold that low and we should exit the trade.
That would give us a profit of at least $600.