5.30.2012 Cable Trade Review

Seemed like a long way to go for little reward so ended up closing the position for 1.5% gain.  Like to get a 2:1 reward to risk ratio but in this case I am more in a scalping mode this week so I'll take it.

I really should have put 2% risk on this one.  That's three wins in a row so I will increase risk back to 2% if the next trade warrants.

Trade on 1 hour chart.  Entry and exit prices noted.  Type II divergence shown.

SMT divergence.  This is kind of iffy.  Looks like I cherry picked an insignificant swing high during LO on the 15 minute chart.  Sometimes it is difficult to show divergence using a close line graph.  That's why it is important to also be watching for SMT just using candles.

USDx divergence.  Note how the USDx (red line) makes a lower low than previous swing lows (Asian range).  At the same time the cable (purple line) refuses to match the lower low with a higher high than it's Asian session.  Showing weakness in the cable.

A/D divergence.  I did not even note this before entry.  Definitely another reason why this could have been a 2% risk trade.