Overview
Last night’s breakout was modest, but trade-able. If your profit target was modest, as well — i.e., it your weren’t greedy — then you should have done okay. My profit targets were too large, and I struggled as a result.
I placed 2 orders in each direction last night, with a 30-pip TP1, and a 60-pip TP2. The breakout to the downside hit my Sell Entry orders, but failed to reach TP1. After futzing around for a couple of hours, the price headed for my SL, missing it by just a fraction of a pip.
When it headed down again, I started tightening my Take-Profit orders. After babysitting the thing for half the night, I managed to get out with 10 pips on one order, and 20 pips on the other —altogether, just one-third of my original profit objective.
Later, on the news spike at 4:30am my time, the GU ran past my previous SL, and would have taken me out, had I not managed out of the trade earlier.
So, for me, last night, managing my position saved me 10 pips + 20 pips + 30-pip SL1 + 30-pip SL2 = 90 pips, over a set-it-and-forget-it strategy. Last night, active management saved me a bunch of pips. Night before last, active management cost me a bunch of pips. Go figure.
To my mind, the jury is still out on whether active management beats set-it-and-forget-it over the long run. If the two methods produce basically the same results, long term, then there’s no return on invested time for the extra hours spent staring at your screen, and tweaking your trades.
So, what is our chart showing us tonight?
1. A channel is forming. Why is this important? Because the boundary lines of channels (and triangles, pennants, etc.) are sloping support and resistance lines. The price will fail to breach these lines, as long as the channel (or other pattern) is intact. So, in our analysis, we have to give these channel boundaries the same respect we give to horizontal support and resistance levels. This newly-formed channel has a lower boundary line which is falling away from our breakout zone. But, the upper boundary line is crowding the current Period HIGH — so, we will take account of it.
2. The shape of tonight’s chart (the part inside the “box”) looks very much like last night’s chart. “It’s like deja-vu all over again”, as Yogi Berra would say.
For the “long view”, I’ve switched to a 15-minute chart (below), instead of my favorite 5-minute chart, because it’s easier to read at this reduced size. Later, I’ll post a close-up of tonight on the 5-minute chart.
Thaaaaaaat’s all, Folks (until midnight).
Clint
