PLEASE READ THE DISCLAIMER AT THE BOTTOM OF THIS PAGE WHICH APPLIES TO ALL CONTENT IN THIS BLOG AS WELL AS ANY OTHER MATERIAL FROM WE ARE FUTURES TRADERS LLC. READING ANY CONTENT BELOW CONSTITUTES AN AGREEMENT BY ALL READERS THAT THEY HAVE READ AND AGREE TO ALL THAT IS SET FORTH IN THE DISCLAIMER AT THE BOTTOM OF THIS PAGE.
Friday, November 13, 2009
TEXAS TEA FOLLOW UP
Here is a summary of an actual trade I made following up on my post on Crude Oil as being poised to decline. The little blue arrows are where I entered this trade, trade station puts these on the screen when you enter the trades. Although these blue arrows annoy me because I always have to manually remove them from the screen, it does prove an actual trade was made at these prices, so I guess it is okay to have them on the chart.
This is SCO an inverse Oil ETF. Since it is an inverse etf it rises when the price of oil declines. It comes in handy because you can effectively trade a short side trade in an IRA account. I made this trade in both my regular stock trading account as well as my Equity IRA account.
I had posted the heavy commercial short position recently in Crude as a reason to look for a decline in prices. The problem is that is a fundamental condition, trading the market on a short term basis is a different story. The price chart if you look at crude is very choppy right here, as a result I determined that this should be a short term trade and not a long hold. Crude did form a nice pattern with one of my entry techniques, yet the market is moving in a sideways to down in a channel, so I thought the opportunity was basically just a short term one to the bottom of that channel.
When today gapped up above yesterdays high on the open I exited the trade and took profits. At this gap opening Crude was getting close to the bottom of it's trading channel. Since gap reversals can be powerful reversal trades at times, I often exit when I see them especially if I have a good profit in the trade at the time like this.
I do expect Crude to move lower, so I will be looking for another way into this trade when the futures market sets up an entry pattern. Also notice the huge divergence in the Pro Go oscillator ( the red line at the bottom of the screen ). This is a Larry Williams creation that is very good at spotting turning points in markets. It is available on alot of software programs nowadays.