Top chart was saved 7:02am ET this morning. You can see price was right at the D point (top) of the yellow AB=CD. The fact we weren't higher from overnight trading and Stochastics were very overbought, and we often get a reversal from overnight trading, it seemed very possible we'd reverse back down from this level. We also could rocket up further at the 9:30am ET open of the cash session, which of course would be great for our trade.
To address this binary situation, we moved our Stop up from 565 to break even at 589. If we continue upward then the tighter Stop shouldn't matter. If we start dropping then we'll be protected from losses.
I sent the following Tweet this morning at 7:03am ET:
"Moved our Stop up to 589 break even 7:00am ET this morning on our Long May Corn Futures trade. Stochastics are high and we're hitting the yellow AB=CD level."
The bottom chart was saved just after the corn futures market close. You can see we ended lower. Our break even Stop was hit 9:36am ET.
You can see the BB/KC Breakout is still looking good. That doesn't mean price can't continue downward. Also, we never dropped below the 3ema. So this is still a Bullish looking setup. But we have no actual indication we'll continue upward.
How would you handle this situation? I decided to wait and see. Especially considering tomorrow is a Friday. Friday's are often a little slow in the markets, and a weekend means you cannot manage your position if news comes out.
After the market closed, I entered a conditional order to go long if price exceeds today's high. If this is filled tomorrow, the objective is to quickly run up to the 61.8% Fib Target. If the order is filled but doesn't hit the Target or the Stop, then I'll figure out how to manage it tomorrow.
Here's the contingent order, that might be filled overnight or tomorrow morning:
Buy Stop 602 (today's high was 601 1/2)
Stop Loss 575
Target 619
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