Exploiting Price Data Variations in Everyday Trading (Part 4)

10/09/2008 9:48 am EST


Timothy Morge

President, MarketGeometry.com

Several days after this trade was closed, I was doing my replay homework on a charting package that we had not used when making the crude oil trade. As price unfolded before my eyes, I began to recognize the market and paid strict attention, looking for a change in behavior. Let me show you what I saw on the “other” charting package:


I marked the range of the “phantom bar” in pink to make it easy for you to see. Without the incorrect extreme high that was originally reported, the slope of blue Median Line set was changed dramatically, and you can see there were no Energy Points up at the area where we entered our position using this data. There may or may not have been a long entry near the lows of the move right before it began to move higher, but this chart certainly looks completely different than the one we used when making the crude oil futures trade.

And yet, trading what we saw in front us, using solid money management tools that we have mastered, and a solid risk:reward ratio, we made a great deal of money per contract.

More tomorrow in Part 5

Timothy Morge


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