Riding The Bull

Yesterday’s post touched on trading psychology – a subject that I don’t get tired of repeating and which holds the essence of becoming a seasoned trader. You can read all the technical books on trading you want, in the end what usually stands in the way of consistent profits is your own emotional state of mind. Or in other words: We have met the enemy – and it is us!

If you are a sub then you know that I’ve been trying to hitch a ride on cocoa futures for a little while now. The beast has thrown me off several times and it’s clearly playing mind games with anyone trying to ride the big bull.

After getting stopped out twice now cocoa is back at its latest Net-Line Buy Level (NLBL) and you know what that means for the Mole. A long position – near 2141 – again expecting to be stopped out by more whipsaw ahead. By the way – if you missed it I recommend you wait for a retest of that NLBL. Given recent history (and the fact that I am long) odds are we’re probably going to get it.

The only resistance I see looming ahead is the upper 25-day BB line – we ought to be good until around 2230. If it manages to crawl above that then our next stop should be near 2500 where it’ll run into its 100-day SMA. Reduce positions at that point or trade a short term reversal.

Now if I get stopped out again – well, as I’ve stated before – that’s the price of admission. Either you play technical setups or you play your emotions. Your trading account cannot accommodate both at the same time.

Cheers,

Mole