Late Day Bounce from Moving Averages confirmed by Stochastics --> $595 profits
5 min Emini Nasdaq 100 Candlestick
Hi,
Today wasn't an easy day.... first price opened with a gap up and I thought it was going to close the gap... but as soon as it closed the gap, it rebounded all the way up... I missed this chance... and waited throughout the afternoon...
Caution!
I want to caution novice traders here who might be tempted to short on the down turn of stochastics from the overbought region as shown in the red circle... notice that although price went down a little, there is no real trend down and price is basically just oscillating within a narrow band... The warning signal actually comes from the long-term MACD, notice that the long term MACD crosses the zero line nicely? Yes, this is a very powerful signal that the trend is up.. and if there's anything we should avoid, it's shorting in such an environment...
Chance.
Patience pays off... price started to drop from 14:30 and I was hoping that it will somehow hit the moving averages and rebounce...
14:55, finally the long waited scenario played out as I envisioned and I went long 1 contract... notice that several minutes later this is being confirmed by an upturn in the stochastics from the oversold region....
at 15:05, I longed another 2 contracts at 1813.75... I held my position until the close where I exited at 1822.75 with profits of $595.