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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • Natural Gas - Not Every Trade Works. The Cost Of Doing Business. 0 comments
    Jan 13, 2011 9:32 PM

    Thursday Evening  13 January 2011

     We have tracked Natural Gas for the last few months as it moves
    along the right hand side of its current trading range.  The import
    of that is the further along price goes, the closer it is to a breakout. 
    However, some ranges can last for years.  Still, there are viable
    opportunities for good trade potentials.  Here is one that barely got
    out of the gate.

     This trade was based on what is called a failed probe.  In this
    instance, price went lower in early morning trade, and there was a
    large volume spike.  This often represents stopping volume. There
    was no down side follow-through, and that is what confirms the
    potential bar as stopping action.   The next several bars held the
    4.400 level, demonstrating support.  After waiting for confirmation,
    a position was taken late in the day, and a stop of 439.76 was placed
    under the low.  The potential was back to the last swing high, the
    4.560 area.  It was a better than 2 to 1 risk/reward prospective trade. 
    This was around 1:20 p.m..

     NGG 20m 13 Jan 11

     All the waiting to make sure things were falling into place fell one
    intra day period short.  The next time frame began a decline in
    earnest, and it did not stop until 4.378, just a few tics above the
    4.376 stop.

     Later on, after regular trading hours, price gave way, and the
    position was stopped out.  Was it worth taking in the first place? 
    A look at the daily...

    NGG 20m 2  13 Jan 11
     There had been several failed probe  buy opportunities starting in
    October and noted by the arrows.  Five times, there was a decent,
    profitable rally to follow.  The sixth time was not the charm.  It is all
    a part of trading.  One never knows what the outcome of any given
    trade will be.  Price has rallied back over 4.400, this evening, and
    maybe the anticipated rally will still follow.  Just not with us...

    NGG D 13 Jan 11

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