TDs Journal

Time is time and money is money is one of my favourite quotes but it's always good to change the mantra from time to time.

Don't want to sound like a broken record lol

On Wednesday, I was watching the Soybean market as it came into the rising TL from September '06 and a major previous swing low that also forms a minor s/r pivot.

I saw an inside bar at this level on the hourly TF and decided to take it on a break long at £3 per tick at point 1 with a stop on the other side of it at point 2.

When I got home from work the pits had closed but I saw that beans had moved up after my entry but pulled off the hourly resistance which was a little disconcerting because the other grains had had a strong rally into the close.

In the electronic session overnight, the market came off but in the morning it moved up and made new highs once again. This gave me a degree of confidence, however, when the pit opened there was a sharp gap down.

I admit I had a bit of a "rabbit in the headlights" reaction to this down move. It wasn't anything to do with the size of the position - I had calculated the risk and was prepared for the loss - it was more to do with the fact that despite having a plan you are prone to wondering in the heat of the moment whether you should hold steadfast to the plan or call on intuition and experience and adjust the plan in response to unexpected market movements.

The dilemma for me was that although the beans gapped down they were holding at my entry and then moving up to fill the gap even while the other grains (Wheat and Corn) were falling quickly and violently. I couldn't decide and indeed had no way of knowing at the time whether the fact that Soybeans were holding up was because either they:

a) had underlying price support leading to the assumption that if the other grains turned up then Soybeans would outperform or;

b) that selling had not hit them yet but soon would

In the end I decided, despite being given several chances to get out for a scratch or a small gain, to keep to the plan and hold as I believed the level I had used as the basis for my trade, was a strong one.

At any rate, the beans soon followed the other grains and went down through the support, hitting my stop.

Was my stop in the safest place? The problem with placing it below the inside bar was that the inside bar itself was above the TL and the previous swing low. Therefore a complete test of support may have been anticipated on any downwards move.

This thought was confirmed by the spike low which was short lived when the market was bought up at slightly lower levels.

I always find that you learn more from the losing trades than the winners and I had a lot to think about after this one.

The loss was relatively minor though at £75.

What is your view on the contract now? With no close below your support (red line), do you remain bullish and on the lookout for another entry on pullback? Or have you taken the whole trade off the table....

great trading BTW.

Hi MrGecko, thanks for reading my journal.

Rather than take a view, I try and follow the price and stay open to all eventualities.

However, I can say that price has held above the confluence of a rising TL and a previous major swing low so there is support. While we are above support and a strong one such as this, I am looking to be a buyer.

Interestingly, price has hit what was my first target in the trade I took, head on (see chart attached) and found some resistance...

At each resistance level on the way up, I will be looking for shorts into the downwards trend that started in June...

I had a feeling that the Dollar/Canadian cross was going to break down today. The weekly TF is showing several consecutive pin bars.

There was considerable support at around 1.0575 and as always what I wanted to do was get in well above this so that I could put some distance between my entry and any bounce that may occur.

I followed the price up for most of the day, waiting for the optimum entry, before seeing the failed break of the descending hourly TL and the rejection of an s/r pivot, resulting in an inside bar.

When I saw this, I put my order into sell £3 at point 1.

Price then went straight down, holding only briefly at support.

I had several targets on the way down based on the daily TF (the red lines on the chart). I decided to take £1 out at point 2 which was the first target. This was a significant pivot on the daily and I know this pair can be very choppy so as soon as I had one unit out and I noticed the price stalling, I covered another £1 too.

I then rode the final third down to point 3, where I exited with a limit order.

Total profit on the trade was £319.

wow! at this rate TD, very soon we will be looking at a 1M GBP account balance

Hi mate. Just looking at the beans, it's quite difficult at times to buy a selling market, less clarity for the buy side as opposed to finding a decent sell price. Are you selling the 150 area now. Good trading mate.

I am not currently considering a position in this market but I will continue to watch it.

The best way to describe what I will do in the future is:

i) Keep an eye on the path of least resistance.

ii) look to cover longs or go short at resistance.

iii) look to cover shorts or go long at support.