Trade of the Day


Today’s trade was an Oil Feb. contract with a buy order from a price of 43.99.  The price had been moving in an upwards trend until it had reached the major support/resistance level of the white line at a price of 44.00, where it moved both sideways and back towards testing the Moving Average blue line.

The yellow circled green bar is our buy signal as that bar closed near its high which was almost the same as the major support level of the white line at a price of 44.00, which it couldn’t hold the price below.  It was also reversing the mini-trend of the previous six bars that had come back from a recent high of 44.93, while is was still with the overall upwards trend as the Moving Average blue line had recently crossed above the Moving Average red line, as denoted by the yellow X.

We would place a buy stop order just above the high of that bar to enter the market from a price of 43.99.  Once in the trade we could see that the last major price move was from 43.00 to almost 44.50, so with the pullback to where we entered the market we could look for the price to move another 1.50, hopefully all the way to 45.50.

The price initially reached the same level as its most recent high before it made a pullback and moved in a sideways channel for six bars but with the trend recently moving to upwards it would be smart to stay in the trade and wait for it to break the major support/resistance level of the white line at a price of 44.50.  When it did reach that level, it quickly continued on its way to the next obvious price target of the major support/resistance level of the white line at a price of 45.00.

From there the price very quickly moved right through one major support and onto the next major support/resistance level of the white line at a price of 46.00.  With such a large red bar that closed near its low we would look to exit the trade at that point or have our stop loss order triggered when the Parabolic SAR red triangles were broken inside the yellow circle.

That would give us a profit of anywhere from $1500 to $2000!

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