I took this trade but it was reactive to PA. I only wanted to take the trade after the market had found buyers. This is a dangerous entry and the correct way to take this trade this is to use the following principles:
- I know the levels before I go to bed
- I can watch the open and work out which levels are being rejected and accepted
- Then I can choose a level to buy – whether or not there is any confirmation – today this would have been to get in at
CBOSwith a tight stop just below.
- By taking the trade this way, I can take at least half off prior to the open if i have a nice profit or I can tighten up stops and allow for some gyrations around the cash open.
The aim of this trade is to have a long position when the cash market opens, to take advantage of a potential fund buy in.
My entry was above 500, this is too late as the SL is random and can easily be hit before the open or during it – there’s no defense here – the market can easily just helps itself to my stop.