Futures Trade of the Week : $CC Cocoa Futures Great Reverse Trade. On March 10, we received a received a 6 time Ichimoku Sell email alert. Here is the email alert:
Notice, all the time frame had a strategy 2 which indicates a trend continuation on all timeframes. This is not good. You need at least one time frame to have a strategy 4 for a trend to occur. This indicated that this instrument could possible reverse but it needs to be support with chart actions.
Below is the 240m time frame fro the instrument provided by Tradestation
The blue arrow shows when the email alert was received. It clearly shows we have a “triple” bottom with no black crosses as a resistance. Without the black crosses resistances, this was indicating it could possible reverse. As a result, we are going to a lower time frame to look for a bullish setup. We are going to 30m because that is the lowest day trading time frame we trade. When things reverse, it will go from lower to higher.
Here is the 30m:
The blue arrow shows when the email alert was received. We will now look for a bullish setup i.e. green zone. Later on March 10, we could a bullish setup with purple dots support. Ideally, we want crosses with dots but that that is going to happen when we are looking for a trade reversal off a triple bottom.
The trade entry is 1.915, initial stop of 1.906, preserve mode of 1.952, and target of 2.055. This was a pull back entry. We could have also setup a breakout entry but the reward/risk was not good so we had to keep our risk low.
The target was reached on March 14
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