MoonTides 03/21/2002 at

a division of

Today's email said:

Strategy: Trade the Tide turn near 1:40

1. Watch for the opportunity to go with the trend coming out of 1:40. Be alert for the turn coming early or late. Be patient and use the tracking indicators. Plan to trade in the direction of the 110 EXMA coming out of that time frame. Prices should stay on one side of the 110 EXMA and it should be moving, or curl up or down from a flat position. Prices should be within about 2 points of the 110 EXMA. The 20 minute EXMA should have crossed the 110 EXMA, or dipped toward it and then pulled away from it. When this setup is clear, enter in the direction of the 110 EXMA with a 3 point stop. If this setup is not clear by 2:50, skip the trade.

2. Move the stop 1 point each 30 minutes.

3. Cover on a 6 point gain, at 4:00, or if the range reaches 17 points.

The chart is annotated with the events as they unfolded in real time.

This trade was a little difficult because the 20 EXMA crossed the 110 down, then up. The key here was that the 110 EXMA did not curl down before the 20 EXMA turned up, crossed the 110, and then the 110 curled up. The key here is to wait for the 110 to move. An aid is to watch to see if prices bounce of the 20. If they don't, you may have a "head fake."

If you had taken this as a short, thinking the green +Tide was in effect, the 20 EXMA recrossing 110 EXMA was a clear indication that the sell was not going to work. You should cut losses there. If not, your trailing stop would have gotten you out. Always have a stop in the market- a real one. Mental stops are bullshit.

By 2:50, this trade was very clear, which is what I mean by having patience.Also, the red -Tide and the blue 110 EXMA had the same slope from early morning into the close. That suggested the trade was a buy. But right in the trade window, the 110 went flat. You handle this by waiting until the setup is clear.

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