I am looking to readdress my blog post on the Natural Gas contract from August 3rd, 2011. The idea in my previous blog post was to buy the Natural Gas contract after confirming momentum to the upside using a Buy Stop order at 420.0. We were trading at 415.0. The strategy was successful in that we did not get the confirmed move to the upside. We would not have been filled and, in fact, the Natural Gas contract sold off by roughly 27 cents to a low of 387.5.
October Natural Gas:
Buying on a retracement move back to the upside.
Consider buying off of a recent sell-off using a buy stop order to confirm continued price action to the upside.
Objective would be a re-test of the recent highs while risking a breakdown under this Monday’s low.
Buying at 410.0 on a STOP
- Risk would be 385.0
- Objective would be 455.0
Trading the regular contract:
- risk is approximately $2,500.00
- objective is approximately $4,500.00
Trading the mini-contract: (1/4 the contract size of the regular)
- risk is approximately $625.00
- objective is approximately $1,125.00
Trading 2 mini-contracts: (1/2 the size of the regular contract)
- risk is approximately $1,250.00
- objective is approximately $2,250.00
Have a look:
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