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Here we are back at Monday…
Let’s start with oil. As mentioned on the weekend, oil had given us a sell trigger in the futures, but we were waiting to be triggered into a trade in the stock market proxy: SCO.
Let’s take a look at the chart and give you details of the trade.
As you can see in the chart above all systems were go. A stop-buy had been set at $32.81. SCO, as you may recall, is an ETF that mimics the price of oil in that as oil falls, it rises. This allows for those of you with accounts that don’t allow the most sensible strategy known as shorting to actually benefit from something falling.
Details of our trade per our risk/capital allocation rules.
Position size = $10,000 (10% of the portfolio)/$32.81(stop-buy price) = 304.785 rounded to 300 shares.
Trailing protective – stop is at support at a rising window 5 candles from the right at $28.16. This is $4.65 of risk.
Our rules allow us to risk no more than $2,000 (2% of the portfolio) per trade combined with a 10% limit on initial position size.
300 shares X $4.65 = $1,395. This is below our threshold at $2,000.
S&P 500: The trend is still down with our 21 EMA (blue) below the 55 EMA (green/brown). We are still waiting for a clear signal here.
Bitcoin: We have a down trend in the futures. The stock market proxy has a stop – sell in place at $6.23. This is just below the support level created by the rising window around the $6.30 mark. If we are triggered in, details will follow.
Gold: Gold is still in an uptrend, but dropping back. If there is enough push back that the price is taken below the 21 EMA (blue) and then back up to close above the 21 EMA, we would have interest in a long trade.
USD/EUR: this currency pair is still in an uptrend. Currency pairs take some getting used to, but well worth it. We continue in a trade with EUO, our stock market proxy.
Apple: Here we are trying out a bit of commentary for the chart.
So much for that idea, the file format is not compatible. We will try and sort that for next time.
The price and the 8 EMA (red) are both above the 55 EMA (green). Theoretically should the 21(blue) also rise above the 55 EMA, we should have an uptrend and therefore a long trade.
My problem as I bring support and resistance considerations into our process is the resistance that has formed around the $290 level and then another level at $300. I am not interested in the limited movement that may occur due to the resistance levels. We will probably need to wait until the price clears the $325 level. We know that stop-buys are being placed just above this level and the price could run like a stabbed rat if we get there.
Any questions or comments, please drop me a line at: firstname.lastname@example.org