- Analyzing the symmetrical triangle once more as a bullish trade emerges.
- Why our last trade failed and how we can learn from it and not repeat the same mistake.
Triangle
We have been patiently waiting for a direction in CL after price has been sitting within the symmetrical triangle for the entirety of the year.
In the last analysis, I pointed toward a long trade at the bottom of the triangle. Looking at it again now, the stop was just barely hit before price shot back up and hit the target. It’s a lesson to once again, not choke trades and give them some room even below recent lows. Overall, the trade was a good one, but it shows how important it is to employ proper risk management. Due to the fact that I did not give the trade enough room and tried to minimize the risk by a few ticks, it cost me a 350-point profit. Take a look at the entry, stop, and target placement here.
It is vital for us to learn from our mistakes if we don’t want to repeat them again in the future. A reluctance to review mistakes is a sign you are trading from emotional subjectivity instead of objective probability.
New Entry
There is an opportunity lurking but we need to wait until after the inventory report and probably until the daily close. Looking at the candlestick formation from Tuesday’s session, we have a bullish rejection off the upper triangle line with a long wick forming a spinning top, indicating indecision at current levels. This is a bullish sign because of the triangle formation. A green close today would confirm a long entry with stops below today’s low. The trade is not a great probability setup but it’s with anticipation in mind that the market will break out of the neckline I labeled on the chart below. This will bring the $91.57 target into play so the risk-reward is good enough for us to look at taking the position.
