Dislikedthis is an example of the correlation of DOW and UJ I was writing before... the previous close of the DOW was UJ at 103.33
now the DOW is -19 before open. we'll see how evolves.. but UJ has formed like a double top in the chart... so I guess UJ has to go down to match DOW.. or DOW will explode up at open.Ignored
So if your Trading Capital is $25,000 US Dollars and keeping to my rule of not using more than 20% of your capital or $5000 or 5 positions in this case.
Then my strategy would be to short one position now at 103.833 and then wait. If it goes up further and no new news a second position at 103.98 would be OK. Then wait. A Stop would be put at 104.10 and the second one at 104.30
If it goes against you the maximum loss is the place where you put your stops and you only risk a small part of your capital. If it goes your way LOWER your Stop to lock in at least 10 PIPS in Profits. Any Questions or comments ? On 2 positions your loss would be about $600 US or 2.4% of your capital on a worst case scenario. Then of course you can re enter at a much better short point if New Data has not caused the Trend to reverse.
If you are really confident and it does not break 104.00 you could add a 3RD position but because of NEW news you need to be more careful then usual. Watch if Dow Futures get better or worse as the morning approaches 9:30 AM EST and the open. Also this AM, Housing Data at 9:00 AM (Schiller)
Bruce
{Promotion Removed}