Forex Magnum

With the recent shooting star just below the three dollar level on Wednesday of last week, we have suggested selling this market. This natural gas contract has certainly been in a downtrend for quite some time, but it must be said that it is fighting as for it its very life over the last couple of sessions.

The three dollar level still looks like massive resistance us, but the fact that we have broken down below the bottom of the shooting star and natural gas has held in so vehemently does have was wondering if there isn’t some kind of massive pressure building for breakout. The number one rule in trading is to stay flexible, and also understand that you are paying for information. In other words, we know that if our position loses in the end, that the three dollar level has just given way and that is a big deal in this market. The solution of course, would be to buy on signs of support above the three dollar mark.

It is with this in mind that we think it is possible that this position will end up in a trading loss ultimately, but we stand by the technical analysis and can only do with the charts tell us. At this point in time things to look very precarious for our short position, but we are not ready to give up until we close well above the three dollar level. In fact, there’s a good chance that this is an example of what stop losses are for.

Of course, this trade could end up working out in the long run it may not matter. Nonetheless, you have to be willing to look at a chart and understand that things are fighting you at the moment. With this in mind, we certainly wouldn’t sell at this point as it looks like underlying strength is trying to make a comeback. On the other hand, if we weren’t involved in this market we wouldn’t be buying now, because we can see so much resistance all the way up to $3.10. With all that being said if you are not in this market, it’s probably best to stay out until the participants make up their mind about the three dollar zone.