Wednesday, March 13, 2013

Cotton trade gone wrong?

I shorted Cotton earlier this morning. Its hourly ADX(7) was over 70, which is where I usually start looking for counter trend trades. Cotton's recent high was 88.78, so I set my sell stop at 88.50 because with an ADX(7) reading around 70+, I did not expect it to take out the previous high.

Well, I was wrong. It took out the prior high comfortably, and I took about 65 ticks of heat! Not good. I covered the trade after the electronic session open in the evening for a small profit of 13 ticks. The ADX still is high, so it might still be a short, but I wanted out. Usually, I target a retrace to the hourly 21EMA on such trades.

No comments:

Post a Comment