Hubert Senters here.
Let’s take a look at the bond market. So let’s say you’re in this situation. This is a situation I am in currently right now and you may have been in the situation yourself.
I have a trailing stop-loss. I’m using a parabolic as they are. I should have been out of this bad boy, this trader out here that I’m just in for the day at $143.13, 30 seconds. Clearly, I missed it by a couple points or a couple of ticks.
I should be out of it because you can see the purple turn to sign saying ‘’hey man this trade is over, you need to be out of it.’’ So one of the worst things you can say is ‘’I’ll just let it drop down again.’’
The right thing to do is trail the stop-loss down. You’re going to need one or two things either hit close right here and take the $843. Or I can say okay, where’s the — I can do actually three things, I can either hit a sell, just close out the order which is the proper thing to do or I can try to get cute with it go well, if it goes above $143.17, 30 seconds — so if I can move this down here, I like to use it right here or I go right here.
So I’m just going to say okay ‘’well if it goes above $143.17, 30 seconds right here. Clearly, I should be out of it. Well, I should have been out of it here. I just wasn’t paying attention. I got distracted.’’ I don’t know if it’s ever happened to you before.
Now, the other thing I can do is if I don’t want to just hit close and take the money which is the smart thing to do. I’m trying to reiterate that. Second is I’m looking for this most recent high right here and go ‘’OK, if it goes above $143.17 I’m definitely getting out of this thing. I am going to trail it and I’m either going to get trailed out on that.’’
In other words choke it out or I won’t be out by the end of the day which I’m definitely in because I don’t want to hold this trade over the weekend especially with the volatility.
Third thing I can do is I can look at the bid and the ass side and see where are they stacking up and you can see right here stacking up $586, $570, so that’s about the right space, we’re right here, $629.
There’s a little bit more overhead resistance so I could get a little cute with the exit of the trailing stop-loss and say ‘’well, I’ve got more friends here at $143.18, 30 seconds so I can move it right up here and do that.’’
So my question to you is ‘’which one would you do?’’
Okay. Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
