Since the beginning of December, hourly key indicator had encountered losing trades that purely based on stop and reverse trade signals. It was SEVEN (7) losing trades in a row with accumulated losses 68 ticks or RM1,700.00 per contract. There should be a total of TWELVE (12) losing trades in a row if the losing trades included from November with accumulated losses 197 ticks in total or nearly RM5,000.00 per contract.
We finally witness such losing trades without a single profit trade in within that have more than the initial margin requirement for cpo futures trading on Bursa Malaysia Derivatives. This is a very good warning to all technical trend traders who follow strictly on technical indicators that risk capital on cpo futures trading should have much much more than the initial margin requirement.
If margin requirement is 5000, triple up risk capital to 15000 for ONE contract so that technical trend traders can comfortably and psychologically well prepare for such a bad situation before riding on a few good trends that enough to take back all the loses and extra profits.
The hourly key indicator is now holding on short 2648 after the cpo futures price was closed 2648 at 6pm yesterday. The SAR buy signals for next 5 hourly trading sessions will be around 2657 to 2661. It means at any 5 trading sessions, key indicator will turn long once cpo futures price is traded above the levels at that particular moment.