This is probably a disappointment to many readers when I cover something other than Gold or stocks, but there are other markets out there. Above is a Sugar Chart and you can see we are setup for another decline. We have a momentum rollover in the top pane, with a rally against it. The bottom 3 panes also show basically the same thing, downtrends with a reaction against it that is still under the downtrend line.
I always want to get the first one, which is why I am often active towards perceived tops and bottoms. The trades are harder to get right in those areas, but when they change direction often a quick windfall shows up. That is what happened on the last Sugar trade I posted here. I was able to get it right at the top and got a nice quick ride down. Me Likey Dem!!
The sell entry is marked on the screen where the red arrow is shown with a 1 next to it. This chart is from a small account I just risk about a grand at a time in just messing around. I have orders in at this level also in my larger accounts. My usual size is 10 lots or so just to give a general idea of the size I trade. It depends on the stop amount as far as how many contracts I trade. I use fixed perecentage risk amounts. Once I know the risk on a trade I divide that into the total dollars I am willing to risk at a time, and that is how I get the number of contracts to trade. Today's range was pretty big, so the probability of a fill on this tomorrow is probably not very good but you never know. That is why they turn the machines on every day. So many times we just assume certain things will happen, rarely do they ever play out exactly as we expect.
This market is an example of where commercial players had been short for a very long time, just hedging against the big uptrend. Had one just noted their position they would have shorted themselves into oblivion blindly fading the big runup. This is why I have repeatedly stated in here that the COT data is really an art and not just hard numbers. You really have to know when to hold em and when to fold em with that information. This is easier said than done. However, it is worth learning how to do it in my opinion.
Stocks I am not sure still, but they appeared to do a little break out above a downtrend line today so they should have a bit to run. I personally am hoping for a pullback to setup my pattern entries up which are not yet there.