Here we are – the weekend, not that much different than Monday to Friday, except the “Round up”. I know, right?!
The thing that you need to understand as we carry on trading in the same manner, the same symbols, the same method from my book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing …PROFITABLY!’ …take a look:
…is that this weekend review is just like the review you should be carrying out on a daily basis. I go through the two main methods for deciding what to trade. I’m sure you can pick it up as we go along from the examples here.
We have five instruments that we are looking at. They are futures, so we go to the stock market for one bullish equivalent and one bearish for each one.
Therefore, you don’t need to look at both sides: UP and DOWN. If the down has a trade signal which you cannot make use of you go to the up symbol and vice versa.
Each day this week I will go through the chart of the futures contract itself. But for today we will deal with the stock market proxies only.
We have one trade open at this time and that is long Gold.
To the chart, Robin…
Our trade was executed just above the resistance line at position 1 at $61.57, a protective trailing stop was placed just under support at $57.63.
The high on Friday (15th) was $63.20. This anchored our trailing stop at $59.26.
The reason for entering the trade was explained previously, but will be repeated as we look at the end of week charts.
SSO is the stock market proxy for the S&P 500 rising. It is a double up symbol as most of our stable are: if the S&P rises 1%, the SSO rises 2%.
Our ideal set up is if the price or the 8 EMA (red) rises from below the 21 EMA (blue) after the blue has established an uptrend by crossing above the 55 EMA (green). If the trend has not been established by the 21 EMA crossing the 55 EMA, I would be ok with the 21 ROC (in a lower panel) being above the 0 – line. At the time, or within three days. We can see that the price and the red EMA have closed above the blue EMA. The blue EMA, however, is still below the 55 EMA (green) which would normally be a downtrend set up where we would not go long. We see that the ROC is above the 0 – line. Giddyup.
Except, I like to include support and resistance considerations into the equation if they are nearby. Read the book.
The resistance line at position one is a problem. I need to see a close above this line before placing a trade. Our stop-loss (protective) would go just below the support line at position 2.
Onto 20 year treasuries:
UBT represents the UP for 20 year treasuries. You can see almost the same conditions as for the SSO above present on this chart. The difference is that the ROC in the lower panel is below the 0 – line. We have overhead resistance at position 1. I must see a close above this level to put in a trade. Any idea where we would put the protective stop?
U.S. Dollar Index:
Rinse and repeat. I have marked the resistance and support levels for the buy and the protective stop. Not much more to say.
Oil: what a gong show. We did really well going short oil (short = profiting from a declining price).
UCO is the UP version, the proxy that mimics the rise in oil prices. I said I would show all the charts every weekend. There is just not much to say about this one. Normally, if we see a chart like this we would immediately turn to its DOWN brother. That chart is not going anywhere either.
For a little treat, let’s start our weekly review of the underlying Futures contacts with a look at oil on Monday – you are most welcome!
That’s it for me. As always, if you have any questions or comments, please drop me a line at: firstname.lastname@example.org