Wednesday, August 19, 2015

Why We Shorted Oil When We Only Traded At The Day's Long Execution/Target Zones

CL TS TradePlan Oil Chart Review - Wednesday August 19, 2015

I'll say this over and over again. If you are looking for buy on green and sell on red .. keep looking. Those systems exist .. but they don't work. What we do is offer precise support and resistance levels. You have to understand how to trade around them. If you get the idea of using S/R levels as areas to do business and go into the day already aware of specific price levels — then you will likely benefit from our service. 

So today when we came in we took a look at the overnight price action during Europe trade and it was obvious that all night we had been finding support at Range Long. 

Knowing that if we could break under Range Long and LIS and hold, and with LIS being under day's RL which is rare, that the probable target was all the way down at day's Highest Odds Long FTD. So we got short on that pop up to 42.82 for cost basis over 42.76 TS # at top of Range Long, scaled to hedge risk, and waited for oil inventories to inject volatility. 

 Oil inventories came outAnd that is what happened next. Break and hold of Range Long / LIS and down to Highest Odds Long FTD target. 

Point? Green doesn't mean buy. Red doesn't mean sell. We took a huge short today based on a likely break of Range Long using Highest Odds Long as target. Shorting a green zone break to the next green zone! I harp on this all the time but they are called Execution/Target Zones, not just Execution Zones, and for a reason. Are you letting your trades run to their true targets? 

Using the zones = $$ but context and risk management is key. What area are you leaning on to keep your risk small? Be a smart trader. Trade smart and trade well. - TraderSmarts

Charts shown with the TS TradePlan Indicator for NinjaTrader

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