Learn To Trade: Combined Probabilities on a Trend to Lower Risk and Increase Reward Potential In the Live Oil Trading Room

This article covers a specific application of the Smart Trend System and probabilities discussed in the Smart Trend System blog post earlier this month. It also looks at taking that situation and finding a textbook room trigger into the trade that can be managed on low risk.

room chart with smart trens system chart

Note the arrow in the 4th bar into H period. This was the sell point.  From the  blog post entitled, "What Oil Trading Room Chart is Right 87% of the Time?" we learned the SmartTrend System we use in the OTR is accurate in predicting the next bar 87% of the time.  That article also further points out that it is 20% likely to take out a previous bars opposing extreme during that condition.  When this condition lines up with a room trade things are really stacked in your favor (> 87% and  80% )!

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If we look to the Smart Trend chart on the left side of the above screenshot, we can see the Trend System was showing red at that time (G period).  At the same time, we can see we were experiencing a 30 minute bar violation we have discussed  many times in the room.  In other words, the H bar high exceeded the high of the G bar.

We also know at this time that the  potential for remaining expansion is in our favor (also discussed in the room daily).

Then, looking to the main room chart, The sell point there is tagging the ONHB, is a HV Prt on a 5t rule (see room member glossary and/or ask in the room).  The market continued lower from there into expected areas of probable expansion.  All these concepts are taught and discussed in the room on an ongoing basis and in advanced member blog posts like this one.

Was this the only way to get into this trade?  No.  Depending on your trading style, you could have traded this pattern all the way down in segments with multiple trade set ups in both I and J periods.  Or, if you are so inclined,  you could have just held for the whole enchilada approach.

How did this trade end up?  The trade was taken out on the SmartSuperTrend  tag circled in  the chart below and where price came up through the red line. SmartSuperTrend is our trade and money management system for the room.

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Past Performance is not necessarily indicative of future results, there is risk of loss trading futures.

See you in the room (sign up on the home page or on the limited time trial above)!

Fina Destination