Cocoa steady, sit and hold.
Cocoa has had another day in a narrow range above the 200 day moving average which is a good sign. I could not say the candle from the 5th of February was a classic doji but it is at the end of a long rally so I think the only strategy from here is to sit and hold if you are already long or try to go long from around these levels knowing that the price will likely come back to confirm the break of the 200 day moving average at some point in the next month or so. The million dollar question is where will the 200 day moving average be at that time.
If you do not already have a long position it depends on whether your stops will allow you to go long from levels around 2050 because you want to at least have your stop below 2000. For me that's ok because I usually will have a 100 to 150 point stop because I'm expecting a move of around 300 to 400 points. I'm already long from around 1850 and added another unit on the break around 2020. If you were only going to put on your first unit now then maybe wait till the price comes back to the low 2000's with say and 80 Point stop and initial Target around 2200.
When I say whether your stops will allow you to have a 100 points. You need to do the calculation of what dollar loss that would translate into and in turn what the dollar loss represent in terms of your overall account. If you are using futures it will be a known amount based on the contracts and if you are using cfd's then you will need to work backwards from the margin requirements and your position size.
Cocoa has had another day in a narrow range above the 200 day moving average which is a good sign. I could not say the candle from the 5th of February was a classic doji but it is at the end of a long rally so I think the only strategy from here is to sit and hold if you are already long or try to go long from around these levels knowing that the price will likely come back to confirm the break of the 200 day moving average at some point in the next month or so. The million dollar question is where will the 200 day moving average be at that time.
If you do not already have a long position it depends on whether your stops will allow you to go long from levels around 2050 because you want to at least have your stop below 2000. For me that's ok because I usually will have a 100 to 150 point stop because I'm expecting a move of around 300 to 400 points. I'm already long from around 1850 and added another unit on the break around 2020. If you were only going to put on your first unit now then maybe wait till the price comes back to the low 2000's with say and 80 Point stop and initial Target around 2200.
When I say whether your stops will allow you to have a 100 points. You need to do the calculation of what dollar loss that would translate into and in turn what the dollar loss represent in terms of your overall account. If you are using futures it will be a known amount based on the contracts and if you are using cfd's then you will need to work backwards from the margin requirements and your position size.
