Indicator Y Long 2374 - Cut Loss Turn Sell

Here there are two issues to discuss, 25 points of rollover as assumed in previous post and change of contract month gap affecting technical trend indicators.

As readers traders can see when the long 2374 was initiated on March contract month which was the last day of 3rd active month yesterday and the very next day today we saw the 25 points gap of rollover, which we mentioned in previous post, helped triggering a stop and reverse trade signal much earlier than we thought.

It is the April contract month that are lower than March contract month by 25 points. If there is no change of contract month, there is no issue of 25 points that affected the stop and reverse trade signals.

Just say, long 2374 rollover 25 points to 2349, if readers traders have high cost of trading, it will be another issue and a painful day.

The cost of trading we mean is the brokerage. If readers traders initiated some positions in April 2349 when the March trade signal was triggered at 2374 yesterday, they could save some good brokerage for a good meal!

Now, the issue on 25 points trigger artificial stop and reverse trade signal. As for this case, we all know that if there is no change of contract month and 25 points, the stop and reverse trade signal may not be triggered so soon. Think about it.

For indicator Y, we just follow change of contract month. The stop and reverse sell trade signal was triggered in the afternoon trading sessions at 2331 which meant the long 2374 cut loss turned sell 2331 today with artificial loss of 43 points (instead if 18 points). However, we will take 43 points in our yearly performance for easy reference.

((FKLI long 1728.5 is holding on but its stop and reverse sell trade signal get higher))

2562 Close, What's next?

As the short 2638 had seen low 2558 and closed 2562 on last Friday, the single trade would have already recovered 1/3 of the accumulated loss if traders did buy back at the market close. I wish to say again, the profit taking strategy will always up to traders' own decisions and the blog here is mainly focus on the stop and reverse trade signals using its hourly key indicators.

There is a change of new contract month today and the hourly key indicator will based on the new contract month even though the cpo futures price is higher by 8 ticks from 2562 to 2570. The stop and reverse buy signals will be at high level still for today which is about 2610s level. 

Palm Oil 6pm Sold 2363 With 46 Ticks Profit

After turning long 2317 on Friday's last seconds spike as stated in previous few posts, technical trend indicator A had finally took profit and turned selling 2363 at 6pm close just now. It generated a profit of 46 ticks or RM1,150.00 in this short term technical trend that helped reducing the 109 ticks or RM2,725.00 accumulated losses since the beginning of this month.

The stop and reverse buy signals for Wednesday and Thursday will be in the range of 2373 to 2377. There is a new contract month, January 2014 contract month, for the 3rd active month which was closed higher at 2367 at 6pm today, but we will use the new contract month instead of old contract month for the SAR buy signals even though it was higher by 4 ticks due to the consistency on every 15th of a month where there is a change of contract month for the 3rd active month. 

Again, the SAR trade signals as given above may have been changed and will not be available on time for public viewing. Therefore, the SAR trade signals for Wednesday and Thursday may just be a guide only.

Selamat Hari Raya Haji to all Muslim cpo futures traders. 

CPO Profit Targets July 3363 And 3383

Again due to discount and change of contract month, CPO Futures hourly indicator was actually holding buy July 3283 and had taken first profit target 3343 yesterday, and now waiting for next profit targets like 3363 and 3383 if the indicator was still using July contract month.

However, as CPO Futures hourly indicator based on new contract month, after cutting loss sold at 3242 on 16 May, it was only turned buying 3294 at yesterday 1130am. The indicator will cut loss and turn sell again if palm oil futures price is traded 3274 and lower at 1130am today. Traders may start placing profit targets like 3334 and 3354 too.

With the 2 scenario as the above elaborated, traders should now able to know that a certain approach or strategy must be taken into consideration when there is a change of contract month and discount.

CPO Futures Sell If 1130am Below 3260

Due to change of contract months, CPO Futures hourly indicator will be much affected as the discount of new 3rd contract month, August, is about 25 ticks lower against July contract month and this may directly force the indicator to turn sell signal. Therefore, traders may need to use his own trading experience to judge the market direction before the indicator does "normalize" after few bars of high low close on August contract months.

Here, traders may start monitoring both price of July and August contract months at the respectively times at 1130am, 1230pm and 4pm t0 6pm to gauge the feel of the indicator on the market which traders need to experience themselves.

If blindly follow the indicator, CPO Futures will turn sell once 1130am palm oil futures is traded below 3260.

18oct2010 - 3rd active month is January Contract now, buy if Jan 2951 at 1130am

Hourly CPO is now following January contract for its indicator, since Jan and Dec price difference is not much, it is not much affecting the indicator. So if 1130am Jan contract at 2951 or higher, hourly CPO cut loss the Dec contract and turn buy at Jan contract.