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97

Trading By Tiie Book - Part VI

1578

1512 1455 1397 1348

1167 1118

\ Jlfi

2<-stop <-stop

75 A, : r.

STOC51

. L.......I-;-.........1, ..........i.....1..............

..................A-iJ

XK 38 73- 38

D=020i 0=1360 H=1414 L=1359 C=1396

Figure 11 0131. Cocoa formed a ledge, but since the weekly oscillator was rising and pointing up, I let it filter out the breakout to the downside.

On 0201, the daily oscillator had corrected to 30 while the weekly oscillator was still rising. I entered a buy order at 1415 with my stop at 1358. The next day I was filled and prices rose gradually to the high made on 0215. Ive shown how I trailed my stops as the market rose. Notice that the trade took out the high of the previous ledge and gave me a jump on the 1-2-3 breakout pictured on the chart.

I concluded the trade on 0216, the day after cocoa made its high, t did not enter another Cocoa trade until 0222.



d- 46 yJ)= 46 11=B2B2 0=1469

H=14?3 L=1463 C=1469

Figure 12 0202. The weekly oscillator for Crude Oil was pointing down after a rather large overall drop in prices. The daily oscillator had corrected and was back out of the oversold area. I phoned in an order to sell a breakout of the low at 1462 and was filled the next day.

Since prices were rather close to a Fibonacci support level, I decided to keep nny stops fairly tight. I figured out where a .618 retracement of the latest main swing would be and placed a profit stop there. If prices woutd hit 1392 I would take my profits and run.

Six days later i was out, having made my profit objective.

Supjpt KetracsKents for marltet suing of 1258 to 1611 : .382 S = 1476 CdottEd)

.5 = 1434 (solid) .618 8 = 1392 (dashed)



2365 2383 2241 2180

<-1 here

= 66 66 0=8215 0=2301

H=2326 L=2289 0=238?

Figure 13 My next Bean Oil trade canne on an upturn of the weekly oscillator. The trading opportunity came clear on 0215. I placed a buy order at 2330 which constituted a breakout of the #2 point of a 1-2-3 low and which was a bit higher than the high on 0215.



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