Lesson 47: Mrs. B raises her stop/loss order again
On Monday, January 14th, 2002, after the markets had closed for the
day, Mrs. B called her commodity broker with the following order,
"Sell l contract of Chicago May Wheat at $2.99 ½
/Stop - Open Order Good Until Changed or Cancelled"
"Cancel my previous order to "Sell l contract of
Chicago May Wheat at $2.87 ½ /Stop"
Chicago wheat futures closed on Monday, January 14th, 2002, at the
price of $3.05 ¼. Mrs. B is raising her stop/loss order in
an effort by her to protect part of the paper profits that have been
accumulating in her account. Unless the wheat market gaps open
at a sharply lower level, Mrs. B should be able to exit from this
trade with an actual (although still hypothetical) trading
profit. Mrs. B left her profit/exit order unchanged. She
saw no need to move it based on the price action in May wheat since
she entered that order. Mrs. B's stop/loss and profit/exit
orders are still OCO orders; whichever one fills first the other will
be cancelled as no longer needed. January 15th, 2002, may be a
key day for Mrs. B. If the market moves significantly lower
tomorrow, she will probably be taken out of her position. If
the market advances, without having dropped below $3.00, Mrs. B will
reconsider the level of both her stop/loss and profit/exit orders
after tomorrow's close. January 15th could be a crucial day for
Mrs. B. Let's watch and see what happens to her Chicago Wheat position.
Bruce Gould
To order a copy of Bruce Gould's "Choppy Market Method" to
understand "Mrs. B's" reason for picking May Wheat Futures
at this time, at this price, click
here.
