7169 7052 6935

6817 T IJ

6700 6582 64&5 6347 6239

STOC 5

start emuft

stop-

= 64 xD= 64 D=02i5 0=6473

H=6523 L=6453 06486

Figure 14 0215. The weekly oscillator for the Swiss Franc had turned up. The daily oscillator had made a correction and was headed back up, I placed an order to buy a breakout of the high for the day at 6524, but the next day brought an inside day.

Looking back I could see that a trading range had formed. It just hadnt been clear to me previously. I drew the envelope (see Figure 18) and placed open orders "stop clost only" on either side of the envelope. Counting back to a representative plunge down by prices, I could count exactly 25 days.

1 now had a 1-2-3 inside an envelope with rising bottoms on both price and the daily oscillator, so I also placed a buy stop above the days high at 6497, and was filled the next day.

The following day, prices gapped down at the open but then rallied somewhat by the close. I began to sweat. I gritted my teeth and decided to wait for the correction to correct. The next day was a bit better. I moved my stop to just below the correction low, and the following day prices gapped up, i inched my stop up a bit, and prices inched up too. Six days after having entered the trade, 1 still couldnt pull my stop up to breakeven. On the seventh day, I was stopped out for a 55 point (ouch) loss. 1 decided Id never eat Swiss cheese or yogurt again. Not only that, but 1 missed the ledge that would have let me reverse and go short instead of just being stopped out, I called mysel a few names (in Swiss), for stupidity.

1568

1457 i486

1281 1158

in here H<-aut herd

t

75 58"

STOC 5"3"F

.................-........-J-......i..............-........™ .. .......I

.........:r:;"...-yy........y-y.......j..

38 /3- 38

D-8222 0=1464 N=1498 L=i443 C=1476

Figure 15 0222. The daily oscillator for Cocoa had reached 30. I placed a buy stop at 1491, with a protective stop at 1442.

I was filled on 0223. Prices moved up for two days, then dropped sharply. 1 moved my stop to the low of the down day and was stopped out for a loss of 30 points the following day.

2550

2488 2426 2365 2303 2241 2189

L I I-

break eyen

It:?-

{-initial stop

/iK= 63 vJ)= 63

D=0391 0=2484 H=24B9 L=2378 C--2388

Figure 16 0301. This 1-2-3 formation for Bean Oil had exceeded a .618 retracement of the #1 point, but had never closed below the .618 retracement line. Ive shown the Fibonacci lines.

My fiii came on the third day after placing my order. Due to the large magnitude move day, 1 was able to place my stop at breakeven after the market closed. Also due the large magnitude of the move, I expected and subsequently got a trading range.

Ive shown my initial stop, my breakeven stop, and the stop that took me out of the trade, which was below the tow of the inside day, right after the market topped out.