The rising trend line is certainly one of the simplest tools used by technical analysts. It is important to be able to identify new trends developing in order to take advantage of market moves. A rising trend line is a straight line drawn upward along successive bottoms. Once you identify 2 periods of higher bottoms, a rising trend line can be drawn and the purpose is to play the third impact. It is well suited to a directional trading strategy, as a trailing stop can be set just below the trend line to protect accumulated gains.
When you are bullish on the market, the long synthetic futures strategy is ideal as it will not be affected by changes in volatility. Profit increases as the market rises. Profit is based strictly on the difference between the exit price and the synthetic entry price. Selling a Put effectively removes the risk of time decay for the long call position.
|Trading Symbol||OZC H7|
|Trading Symbol||OZC H7|
|Trading Symbol||ZC H7|
|Contract Expiry||Mar 2017|
A target of 358.4 is used as it is the most logical resistance area (top from January 3rd). As a trend following strategy, the position should not be closed until a break of the trend line has been confirmed (359).
Once the position is opened, if prices break below the trendline, the position is closed (355). The stop-loss should be raised periodically as the trend continues to the upside (trailing stop-loss).
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