Tuesday, August 24, 2010
UUP Update
Well that divergence was the real deal-remember though, being so early it's only a 1 min divergence, we need more prints to get into the longer intraday timeframes, but it certainly called some market maker activity and the dollar has plunged off it's gap.
6 comments:
The eur/usd trade looks to be putting in a bull flag on the 5 min time frame
Yes, it appears that way. Oil is putting in a consolidation triangle that "should" break higher.
I'm long oil by ERX and held through my stop
Jack, one thing you can do is lower your stop-BUT-YOU MUST lower your shares so at the end you get the same net effect of money risked. You may make out ok on this one, it's developing and thus far it's not looking horrible. But keep that in mind for the future. This is why I prefer less shares and a wider stop initially-the risk money is the same.
I'm long about 30% in this portfolio, with 30% of that in ERX.
Depending on your exposure to any one industry group-this includes multiple stocks in the same group as they tend to move together, I try to keep that group exposure at 10-15% maximum of overall portfolio value. It can be significantly less, but over that and you have little defense against unforeseen gaps down. A stop doesn't do you much good if a gap slices right through it.
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