a couple of things to point out on the recently posted CME short trade. first off, CME managed to trade above, and even close above the channel that the short trade was originally entered. however, this trade was based off a 2-day chart and as such, the trade is still active as prices fell back into the channel yesterday. remember, typically the stops on a trade are triggered on a candlestick close above or below the resistance or support based on the time frame that the trade was initiated from (e.g. 15 min chart, daily chart, weekly chart, etc…). therefore, CME was unable to print a 2-day period candlestick close above the channel and the trade was not stopped out. of course, these are general rules and every trader should determine their own stop parameters based of their risk tolerance, trading style, time frame, etc..
also, remember that this trade quick hit the first target and offered an opportunity to take full or partial profits and now that CME has bounced back to the top of the channel, it once again offers an objective entry or add-on to the short, again, with the approriate stops above. charts in order as posted…
