Click on the chart to enlarge it.
As expected, contraction of the boundaries of the NMA resulted in a sharp move, and in the direction (upward) predicted by the potential buy setup ZeroHits of NMC.
A little over two weeks after the initial buy signal, prices explode through the upper boundary of the NMA, indicating a potential short-term exhaustion, and confirmed by both NMC and NMC2 also having their upper boundaries violated.
This combination of events should have prompted us to exit the trade as of the close that exceeded the upper SD threshold (labeled C > Upper SD). Obviously, had we been carrying the full four-contract position, we'd be looking for the slightest signs of a potential top or turn, so an exit here would have certainly been warranted.
On the other hand, assuming a single contract was initiated at point number 1 and the subsequent signals were completely ignored, the trade yielded roughly 2 and 2/32nds ($2,000+) of profit on a single contract.
This example shows three trades initiated between mid-May and early July. The first trade was a loser (about $500), and the remaining two trades were winners, with profits totaling about $3,100, producing a net profit of better than $2,500 for the three-trade sequence. With margin requirements of less than $2,200, that's 100%+ on required margin.
Will all Ocean trades unfold this nicely? Perhaps not, and no guarantees are implied, but as long as we focus on minimizing the risk to initiate good high-quality Ocean entries we should expect similar results over time.
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