Thursday, March 20, 2008

YM 5 Min Divergence 3/20/08 - Does News Matter?


Our YM trade setup this morning combined divergence of our oscillator with price, a touch of the retracement area and a confirmed bullish harami candle that wasn't too big.

However, most traders wouldn't have taken this trade or would have tried to change something - why? Because this trade was right before a well anticipated Leading Indicators news release and Philly Fed announcement. So how much affect did this have on our trade? Not much...

Entry 12122
Stop 12098
R = 24 ticks
Initial target 12175 (100% retracement)
R to R ratio: 2.2

Actual exit was at 12181 for +59 points or +2.45 R
My exit was the low of the bar entering the 100.8% retracement level. This is a good way to trail your stops on moves that are unlikely to be lasting (such as this one). As it turned out this move had some more juice after this retracement, however, I still believe this was a good exit for this particular setup. You can't milk the market for every tick - get the meat in the middle and keep your R:R in line and life is good.

3 comments:

Catalin said...

Hello

You have very nice trading blog
I want to ask if you want link exchange with my blog http://mapthemarket.blogspot.com
I like to link only clean and informative blog like yours.
Let me know what you think
Regards
Happy trading and green pips

Lord Tedders said...

catalin,

Thanks I really enjoy your blog as well. I've already linked you.

Edward

strategist said...
This comment has been removed by a blog administrator.