Around 6am ET I checked the May ZL chart and what I saw eliminated the need for my morning coffee. The overnight session had climbed to a high of 27.38 then reversed. The precise target, carefully calculated, is 27.42. I always shave a couple points off the target to account for the Bid/Ask spread and in case price falls a little shy of the full target. So I set my Sell Limit Order to 27.40 days ago when I first entered it. I actually think there's a good chance price will go higher than this target, so I only took off 2 ticks. Then price falls 4 ticks short!
When I saw the chart, price had already dropped over 10 ticks. So how do you handle that situation? I fought the desire to exit immediately because I think price will go higher. But its also possible this is all we get and it goes all the way back to break even. I don't want that.
So, I decided to move up my stop loss from break even to 1 tick under where today's candle opened, which was 26.83-.01=26.82, reasoning if it retraces that far, its looking pretty weak. Of course, it slowly dropped during the day and hit my stop.
I figured it would then reverse and start back up, but it didn't. It closed very close to the open. You can see it closed just under the 20sma. I mentioned in the last post the 20 sma could provide resistance. Because of this, I'm kind of glad I'm out and not exposed to a gap down open tonight.
I figure I left $354 on the table (27.40-26.81=.59*$600=$354) because it missed my target by $12 then I didn't see it until it was down about $60. If I knew how things would turn out of course I would have just sold at the market soon as I saw the chart this morning.
Bottom line:
Entered 3/23/20 $26.05
Exit 3/30/20 $26.81
Profit .81 - .05 = .76 * $600 = $456
Even though I only got about half of what I could have, still have to call this a win.
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