Thursday, 23 October 2014

Indicator Y - Long 2137 No SAR!

This is the weakness of the hourly indicator Y where the possibility of big losses as mentioned long before (refer to the write-up in the Learning Corner) when there is no stop and reverse trade signal given in the blog, meaning that the cut loss point will be every far from the entry level. For example, the long 2137 may have very low SAR which may be below 2100 and it is just a cut loss point NOT SAR! Therefore, traders may have to sit tight on the roller coaster ride on the cpo futures prices if they are purely based on the stop and reverse trade signals of the hourly indicator Y to be triggered.

Like previous short 2172 where cpo futures prices was traded to high 2192 (just 20 ticks away!!!) and to the low 2104 (just 68 ticks floating profit!!!) before the SAR was triggered by buying 2137 (only get half of the real profit!!!).

Riding on trends need patient and discipline and also good risk management by not over trading! You may have no choice to give up substantial good floating profit by the time of doing stop and reverse trade, and also substantial high losses as trend trader!