Well, what do you do here? On one hand there is no change in the technical setup that indicates a sell. In fact, we broke up through the Trend Line and closed above it. It still looks bullish to me.
But, on the other hand, we haven't made any decisive move to the upside. We're stuck in a sideways consolidation. We're still right on the Trend Line and its a Friday.
Even though there appears be an upward bias, the biggest influence on whether to exit or hold in this particular situation is risk tolerance. Considering the size of this contract, and the potential for crazy headline risk, I decided the best thing to do is exit near the close today and decide whether to get back in next week.
So, we exited at 2.660 and took a small loss 2.660 - 2.705 = -0.045 * $2500/pt = $-112.50. I don't like taking any loss, small or otherwise, but I prefer a small loss to being long and a gap down on the open in 2 days. I thought about taking a hedge but that's only in case there's a gap up Sunday night. But if I took a 1:1 hedge then we wouldn't benefit from a gap up anyway. Exiting the hedge at the open would be the same as re-entering at the open. So, I decided to just take a small loss.
Count this trade as a loss. We'll try and turn it around next week.
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