Oil has recovered every time at the 200-d m.a. Is this a buying opportunity?
We see five opportunities in the past two years at this long term moving average.
Take the trade (buy options if you want leverage or use futures contracts). What ever you do, sell a small loss and move on if it doesn’t work. Investing is that simple.
Taking trades with a favorable risk to reward ratio. It seems to me that a long position would be ideal even if I am wrong because the reward could take us back towards $80. I am looking at a 2-3 point loss for a possible 10 point gain (minimum 3-to-1 odds with a possible 5-to-1 pay out).
Cut all losses short if the trade fails! (In December 04, crude cut the 200-d m.a. sharply only to recover).
It’s not about being right or wrong; it’s about being able to push the odds in your favor, take the trade and follow the rules. If it doesn’t work – OH WELL! Move on!
Piranha
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