Monday, 24 October 2011

Black Gold Has A Price

I'm batching this week. "Batching" is what they say in Australia when a guy's other half (wife, girlfriend) is away and he has to fend for himself. Luckily, I have Sammy to keep me company. She's about 13 years old and is a great dog. She's a Parsons Jack Russell Terrier that we rescued from Battersea Dogs' Home about 8 years ago. Mrs EL is in London catching up with Kiki and doing a bunch of things that have been added to her list of "to do's". Candace comes down here in a week to help prepare for the Workshop. Slides, curriculum, sanity check and so on.

We heat with Oil here in France and after just filling up our tank, discovered we have a lot of sludge built up since the tank was installed. The house goes back over 90 years so there could be any amount of sludge there that stopped the furnace from working last week. A guy came today and pumped out the 3,000 litres of diesel I just bought, filtered it and cleaned the tank and then put the diesel back. Glad I had a reasonable day trading today.

Today I sold the DAX on the open. Why? It was too far from the 33 EMA. What a simple trade with a simple reason. I did validate the trade by seeing some resistance on the overlapping Profile and that the Big CCI was overbought, but my Prime reason was the distance from the 33 EMA. Easy to put this rule into an algo.

How did I know I was "too far"? Back testing! I know that price will eventually go back to the 33 EMA and I "know" that, currently, an open more than 60 points above the 33 EMA is too much.

In this case, I had almost instant gratification. but often it takes more work for it to "revert to mean". I was also looking for a Fib resistance but couldn't find one. My 27 point profit on the trade made my day. You don't need lots of trades every day. Just a few, perhaps only one.

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