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.
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.
Proceed to lesson 48 by
clicking here.