PYRAMIDING WITH THE TREND

Thu, Dec 16, 2010

ADX, Indicators

We’re short 1 contract from a few days after the top

This is a good place to add a contract as this market is in a strong downtrend mode

HOW TO TELL A STRONG TREND

Bean Oil is in a strong downtrend mode. The Directional Movement indicator shows this clearly.

The green line ( minus line ) has moved much higher than the blue ( plus line ). The red ADX line is trending higher.(The ADX doesn’t tell direction of trend, but the strength of the trend, a move above 30 is considered a strong ADX trend). The ADX indicator is at 34.00 right now

pyramiding 1 PYRAMIDING WITH THE TREND

4-9-18 EXPONENTIAL MOVING AVERAGES SHOW TREND

The 4-9-18 exponential moving averages are also showing a strong downtrend.

pyramiding 2 PYRAMIDING WITH THE TREND

THE ENTRY POINT

The range on 1/15/03 was
Open – 20.15
High – 20.37
Low – 20.03
close – 20.09

The range on 1/16/03 was
Open – 20.13
High – 20.18
Low – 19.87
Close – 20.12

Todays action 1/16/03 Bean Oil made a new low and a higher close. This is a small pivot higher in a strong downtrend and a trading opportunity. If todays low is taken out that is a point to sell for a continuation of the downtrend

A FEW MORE DAYS RALLY

The 1/16/03 low could be taken out the next trading day – 1/17/03 – or also what happens alot is that the market will rally higher for a few days without trading below the minor pivot low just left behind. This would form a small ourhealthissues.com/product/zithromax/ bear flag on the chart.

However it plays out the point to go short is the 1/16/03 low at just below 19.87.
19.85 would be a good place to short this market as this would take out the low by just a little bit

THE PARABOLIC TRAILING STOP

The parabolic inidcator is a good indicator to use when you enter this trade
The parabolic stop is just above 21.00 right now and will move closer day by day.

pyramiding 3 PYRAMIDING WITH THE TREND

OTHER PLACES FOR STOPS IF WRONG

Other stops to use would be a 3 or 4 day high because in strong trends the market will not take out the high of 3 to 4 days ago. Also if the market rallied for a few days and made a bear flag then if it takes out the 1/16/03 low, the bear flag price high is good to use as the stop.

This is a low risk high profit potential trade. We will be using this a lot in 2003 in the daily commodity newsletter.

Disclaimer – All trades are extremely risky. I am not a financial advisor and there are no specific trading recommendations made in Commodity E-book 2002 material. The E-book and newsletter are for educational purposes only and is not guaranteed. Past Performance is not a guarantee of future profits.

Jims Website

Good Trading

Mark McRae
www.surefiretradingchallenge.com

Posted by Admin
www.tradingforbeginners.com

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