Still Long on CFX?....So the market has seen a wild and violent correction with many assets dropping 10+% in only a few minutes.
CFX was no different and seen nearly a 15% move to the down side in less than 5 minutes.
As projected volatility is EXTRMELY HIGH leading to larger than expected moves to the down side. When the market pushes wildly to the upside it provides room for these kinds of massive corrections while still remaining technically bullish.
Yes a 15% move to the down side is still bullish. Looking at the daily even with a 15% move to the down side, because it went up SO FAR an FAST, this 15% drop did not even manage to produce a lower low. Instead we can see it really only brought the price back to the bottom of our ascending channel and last support and resistance flip.
Knowing your environment when trading is CRUCIAL especially when leverage and the risk of liquidation is involved. Wild moves to the upside create opportunities for wild moves to the downside and often times when trading futures it is very easy to close the mind to this kind of a large of a drop and simply take on too much risk. It makes since when the market is feverish to look for bigger moves to the upside. At the same time opportunity for bigger moves to the downside is just as real and risk needs to be managed completely different than a sideways market or fresh new up trend. Volatility is far higher in feverish uptrends and typically leads to mass liquidations driving price into old liquidity before rocketing back to the upside. When everybody is wrecked.....the market will move on typically leaving bodies every where as price hits their projected targets.
With that said current trading plan is to take advantage of the discounted price and continue to hold to the long side for the .25-.26 area. This target is just south of the macro golden pocket and aligning with our next unbroken high.
Trade Well.......
