Riding the Waves: Managing Longer-Term Position Trades for Larger Profits (Part 5)

05/16/2008 12:00 am EST

Focus:

Timothy Morge

President, MarketGeometry.com

I am still carefully balancing ‘boxing in profits’ without getting too close to the current price action, because the prices on this chart still look like they want to run higher and test the up sloping median line, and if possible, I want to protect some of my potential profits but still give this trade all the room it needs to mature.

Price finally makes it to the up sloping median line and I close out both positions at 1.5625. Though this was a very long-term trade, it paid off handsomely: I got long the first position in October of 2006 and netted just over $38,000 per contract; I entered the second position in August of 2007 and netted nearly $28,000 per contract. The wave was long and the ride demanded patience and a balancing act between protecting profits and letting the long-term trade mature. But by carefully hiding my stop orders below market structure, I was able to let this trade mature and stick with it for the long ride.

Catching these larger moves can be very profitable and extremely rewarding if you have the patience and perseverance to stay with the plan and ride the wave to its final destination.

I wish you all good trading!

Best,

Tim Morge
tmorge@sbcglobal.net
www.medianline.com
www.marketgeometry.com

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