Click on the chart to enlarge it.
As the weight of the Ocean evidence implied, prices collapse over the next 4 days and eventually exceed the Weekly lower boundary (dashed red line), and NMC2 as well as the NMM ROC oscillator both exceed their respective lower boundaries.
With more that 30 cents ($1,500) of profit in 5 days (assuming the conservative dual time frame entry after the gap opening), taking profits on these extreme readings would be a logical choice.
Roughly two weeks later (early June), prices rise enough to generate another daily ZeroHit setup and entry, occurring with the added confidence of extreme resistance due to prices coming back to both the daily and weekly NMA moving averages (see the large circled arrow).
Additionally, the bar generating the ZeroHit also generates a hidden Add On trade (taught in the Ocean workshop), which allows an entry prior to the traditional ZeroHit entry the next day.
Assuming that only the ZeroHit setup was used for entry, and that the Fast NMA was used as a trailing stop (close only), this second individual position has generated more than 60 cents ($3,000) of profit and is still open (as of July 26, 2004).
Therefore once again, by being patient and demanding ideal trade setups, these two individual trades have generated more than $4,500 of profit on a market with a roughly $1,200 margin, which is more that a 350% return on required margin in a relatively short period of time.
Note that this analysis does not include an additional contract that could have been placed using the hidden Add On trade taught in the workshop.
Had that trade been invoked, an additional 73+ cents ($3,650) of profit would have accrued in the past two months for a total of $1,500 + $3,000 + $3,650 = $8,150, requiring that only 2 contracts (less than $2,400 in total margin) be held throughout the decline!
Again, no guarantees, but with patience and some thought and effort this style of trading is possible.
(This is the end of Part 2. Go to Part 3.)
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