July Cotton futuress had a breakout setup yesterday that led to a good short sale today; let’s look at how it went.
I circled yesterday’s bar; it was the narrowest day of the previous four, and a doji. I drew the blue horizontal line at yesterday’s low; note that this level had served as support last week; this level was a potential breakout point today. I shorted on a stop at 5815. The first Trade or Fade support was 5821; I wanted to sell when that was broken.
I got stopped into the short, and place a stop loss at 5795, near the high of the day. I used the red trendline as a profit target, this was at 5737. I took profits there, it bounced off of the trendline once or twice then broke through it later in the session. If you were trading multiple contracts you could have used the trendline for profits for a portion of the position, and hold the balance for a bigger break if the trendline was taken out (like it was).
A good breakout sale
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