Wednesday, July 20, 2011
7-20-2011 Revisiting the Umbrella
I just wanted to revisit the umbrella one more time before I move on to another topic. This afternoon the patter developed late in the day, I bailed on my long trade and flipped short on the break of the regular trading hours (RTH) mid-point. At that time I tweeted that testing 16's was a possibility. Sure enough price tested 1315.75 in the after-hours session. I rarely hold through RTH settlement but the weak close gave me plenty of confidence to give it a shot. Although I didn't get the full move I'm still very happy with the profit I did capture.
Just to reinforce, this is a pattern you will see repeat itself very often. Part of trading is breaking down the market into easy to remember shapes, figures, formats, and patterns. Memorize as many as you can and when you see one begin to form you will have confidence in expecting a positive outcome.
Thanks for reading and stay tuned for some new material.