Monday, April 9, 2012
how to enter oversold /cl
gap downs... and oil is broken...
So what complicated pattern do you need to insure a safe entry? It must be difficult.
It's the same old pattern I've been talking about the past 2 weeks - -the triple bottom. Once you see it -- after an oversold condition arises - you have an obvious entry with a clear stop that is usually no more than 10 ticks away from entry.
/cl has been moving 100 ticks or more for weeks -- I think I like this market better than /tf.
I did not trade this morning but eventually (not pictured in chart) the /cl got too far. I waited until - -yup, a descending triple top formed and it dropped about 25 ticks with about 3 ticks of heat into the close. These patterns take time to resolve but they are worth the time and effort.
There was also a triple bottom in /tf at 797ish that resolved middle of day for 70 ticks upside.
So keep it simple. Find a pattern/market that feels comfortable and trade it your way.