Managing the Oil Trade

Really the concepts here can be used to manage any trade, you just have to find what works and what works for you. Unless something major changes, I always try to stop out of trades on the close, there's too many intraday games and you'll be knocked out of the trade like with the false break down this morning.

Above we have a large bull flag which is an upward continuation pattern. I tell you, when something is obvious to you on a chart, it is obvious to most traders and certainly the mrket maker who specializes in that stock, all day every day knows it better then anyone. The market maker also knows where the stops are, both because of the pattern and where hundreds of technical analysis books have taught technician's where to put their stop in a pattern like this and because the market maker has the order book at their disposal. Just about any order entered with a broker is in their book. So they run the stops, just like we saw happen yesterday when the Dow broke below $10k and this am as well. So you have to be aware that this is always a possibility, a false move. Now that the flag has broken out to the upside, in part propelled up by my "Judo Concept" , it's time to move your stop up to lock in gains and not let this turn into a losing trade.

My Trend Channel that I wrote is a very good tool for this, but you need TeleChart or StockFinder to use it as that is where I wrote it. If you want, there is information at the very top of the site on both programs, I'll be happy to share the Channel with you. Right now, the highest point of the lower channel line represents the stop on a market close, it will continue to move up as long as the stock does.

Above is a tool you can find in almost any free charting software called an Envelope Channel, it's not as good as my channel but it can work. You can see the settings and the timeframe on the chart. This is another possible solution. Feel free to contact me with any specific questions.