This post is to update a trade and while we are at it taking a look at one that is pending.
Let’s take a look at the trade that triggered. First the chart and then the details.
SSO is our ETF stock market proxy for the UP side of the S&P 500
First of all, a quick review of the process. We have the blue EMA (21) is above the green EMA (55), Uptrend = Set up.
Next the trigger: the price and or the red EMA (8). Based on those things we are set to go. Next step is to look left for levels that are higher since they represent resistance.
There are choices. Resistance at $81.97 or $83.66. I am a cautious fellow, so I am going with the higher level. I need a CLOSE above $81.97. This occurs in the yellow box. At that time I put in a stop-buy just above the high at $85.63.
The trade trigger occurs just to the right.
The trailing – stop is $81.07, just under support.
$142,200/10% = $14,220/$85.63 = 166.06 rounded to 165 shares
Risk = 165 X $4.56 ($85.63-$81.07) = $752.40 (<$2,844 ($142,200 x 2%).
All our process parameters were met, so the trade is a go.
We will now leave this trade alone until it is stopped out.
We have a pending trade in GLL, our stock market proxy for the downside of gold.
As you look at the right hand side of the chart above, you can see that the moving averages have done their work admirably: identifying the trend and then triggering. The only pause is caused by a level of resistance as represented by a horizontal black line at $33.50.
The high of the lonely candle is at $34.90. The stop- buy is at $85.63.
If the market moves through that level, we will be triggered in automatically.
Any questions, drop me a line: firstname.lastname@example.org.