Riding the Waves: Managing Longer-Term Position Trades for Larger Profits (Part 4)

05/15/2008 12:00 am EST


Timothy Morge

President, MarketGeometry.com

Once again, a little patience and careful planning goes a long way. Price climbs out of the hole and makes a new high for the move and when it breaks above the prior swing high, I move my stop order from 1.3306 to 1.3366, below the swing low that recently tested the sliding parallel and the area where I added my second position. I can continue to ‘box in profits’, as long as I don’t get too close to the market’s action.

How long can I ride this wave? I’ll keep riding this wave higher until price either makes it to my profit target at the up sloping median line or price hits my trailing stop profit order. At this point, it doesn’t matter which order gets hit—I stand to make a good amount of money per contract.

Patience generally does get rewarded and you can see price eventually begins to pull away from the lower median line parallel to the up side. I am eventually able to cancel my stop profit order at 1.3366 to 1.4013, just below the most recent swing low. I now have just under 1500 points of profit in the first long euro position and about 600 points of profit per contract in the second position.

More tomorrow in part 5.

Tim Morge

tmorge@sbcglobal.net email me

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