About those Support Levels in Crude Oil…
Crude Oil traders have found it impossible to call a bottom (reversal) in the sharp decline in Crude Oil prices.
Admittedly I’ve fallen victim to trying to call that elusive bottom in this strong collapsing market but so far it’s not been the case that oil has bounced for anything but a small retracement against the ongoing tide of selling pressure.
The first thing we learn when we study technical analysis is how important it is to start with the trend and study it.
Trends – once established – have greater odds of continuing than of reversing.
That’s core principle #1 and Oil continues to show why trends – even on short timeframes – are important places from which to build trading strategies.
We can trade retracements like bear flags or breakdowns that trigger along the way lower.
It was logical to expect a reversal up off the $90 per barrel target… and then the $80.00 target… but we now trade into $75 as the trend continues lower.
I wanted to highlight a quick chart of Oil and emphasize the importance of short-term trend trading – and the risks of aggressive bottom-calling.
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
We should obviously make sure we do all proper research and only then go with the trade, it’s easier to enter into anything, but when it comes to getting out it, I believe it’s nearly impossible to get it. I am pretty lucky that I can follow this blog to gain a lot. I get similar help and support from OctaFX broker, it’s equally good broker to work with through their low spreads from 0.2 pips while there is also epic cTrader platform, so all this makes trading in these situation easier.