''Do you have any thoughts on choosing entry points for both HNU and HND if I am looking for 20 cent profit on each trade with the goal of getting in and out as quickly as possible. I got burned with HNU when gas tanked and these vehicles decay over time as well so you lose just holding them. I think it is best to play the volatility here and not expose capital to time decay. Although I do understand that going against the short term trend is risky, I bought HND yesterday at $5.65 and sold it today at $5.85, acheiving my 20 cent goal. Any feedback you may have on this strategy or other suggestions based on your technical analysis and experience would be appreciated.''
I am posting the response as it might prove useful to some of you..
If you want to capture a 20 cent trade with natural gas using HNU.TO/HND.TO you must follow a mechanical strategy such as this one I have made for you.
Goal: TO Achieve a 20 cent profit in HNU.TO/HND.TO
Reward: 20 Cents
Risk: 7 cents [you must have a 3-1 risk/reward system in order to get an edge in these markets].
Rules:
1. Never hold the position overnight. This is simple.
2. Follow the intraday trend. If natural gas is up 3% you want to be going long. If natural gas is down 3% you want to be going short. IF you want to counter-trend trade, you need to devise a new strategy than the one I am talking about.
3. Wait for an intraday breakout and pile in long/short on a re-test of the support/resistance line (you'll need to know some intermediate TA for this.. of which I assume you are aware.
4.My site suggests trades that are more longer term in nature so you can't really follow them.
Why will this strategy work? You can be wrong 3 times and still be 'break-even' if you win the 4th time
Here's an image of how to do it (the image is fairly large so I have included the link for you to see it on your display)
http://img695.imageshack.us/i/frameofthinking.png/
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