On June 1, 2015, we received an Ichimoku 5 time frame buy email alert on Crude Oil. Here is the email alert:
The highest trading time frame is 240m. Here is the 240m chart with the blue arrow showing when the email alert was received:
The 240m chart shows that crude oil is a bearish consolidating pattern. However, this bullish could breakout could signal it to break out of this mode. Since we are in a consolidation pattern, we can look at a breakout entry since the reward/risk will not be good. The next resistance is at 61.31.
The only option is a pull back trade. In order for us to take a pull back trade, we have to have a time frame match with either the yellow or green line on the 240m. There was no time frame match so NO TRADE was taken. Sometimes, the best trades are the ones NOT TAKEN. Better to be at zero then be negative.
We only want the high probability trades with a 3:1 reward/risk or higher.
Here is the result at the end of the week on a daily chart:
The yellow line 240m support did hold and it did get the resistance we outlined. However, we did not take the trade. It didn’t fit our entry criteria. There will be some trades we miss and we are ok with that.
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