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114

Tradmg By The Book - Part VI

1380

1327

(-in here

d-- 33 xDi 33 D:0814 0=1295 H=1380 L=i276 C=1295

Figure 62 0814. The weekly oscillator for Cocoa was stepping down. One more down day would create a clear cut sell signaL Since the daily oscillator was not yet oversold, I had a (ow risk opportunity to sell a breakout of the low. I was filled the next day at 1275.

Prices dropped like a rock. In an almost perfectly vertical fall. I trailed my stop above each high and was stopped out on 0828 as shown.

On 0901. With the weekly oscillator still pointing down and the daily oscillator at overbought, I placed an order to sell the breakout of the low and was filled on the open at 1105.

I trailed my stop down and was stopped out at 1098 on the open the day after an inside day, when prices gapped up.



Trading By Tlie Booi< - Part V)

2090

XK= 31 XD= 31 0=8818 0=1800

1 1 \r\ here

2460 M

2336 iflij

2213......

out here

H=180B 1=1796 C=1796

Figure 63 0818. ! was filled on Bean Oil at the open of the day shown by the cursor. My stop was under the previous days low. Prices r oved up for two days and then gapped up on the third day, placing the daily oscillator well into the overbought area.

The day after the gap-up high, prices closed too low for me with a much lower high and a lower low. I didnt like what i saw, so I moved my stop tight under the low of that day and was stopped out on the day of the large move down.

The only thing I could do now was to wait for a correction in the Bean Oii.



Trading By The Book - Part VI

1388

1316

\

1188

1125

1061

buy signal here

;:K= 84 -- 84 D3B1 0=1157

N=1157 L=U25 0=1138

Figure 64 0821. i made several attempts to trade Cocoa over the next few weeks, but could never get any clear cut signals that were to my liking.

There were a series of l-il-lll highs, but they were not confirmed by either the daily or the weekly oscillator. I wasnt able to trade Cocoa again until November 30. Since that was so close to my trading cut-off date of December 1, I didnt take the trade. Ive shown the market, the l-ll-lll highs, the trade that could have been entered at the end of November, and the daily oscillator. During this time, the weekly oscillator was flat durinc all of September and half of October. The weekly oscillator then began a slow rise, while prices continued to drift down until the end of November.



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