Straddle Trade – SBGL-NYSE

19/10/14 – This SBGL stock is setting very strongly in both directions and so I am putting together a Straddle Trade with a Twist. Options traders use this strategy very often when they suspect a strong movement with a stock price but are unsure of the direction and enter both Long and Short trades at the same time.  I am going to be a little more conservative and put both a Stop Buy Order and a Stop Sell Order on simultaneously, but allow the market to initially make its mind up witch direction to take this stock price.  then if we get a False breakout and one of the trades triggers then fails the other will trigger during that failure phase and overall a NET profit outcome should exist, as long as the overall direction is strong.  Or in fact only one of the Trade order triggers and continues with strength towards its target and that largely depends on the Equity and Gold Markets in the coming weeks. There is a strong potential Long trade with my traditional Wave 5 trade setup, giving 8/9 indicators in the green and conversely there is very strong setup for a Short trade with a Double Top formation  I will discuss both trades separately below and their individual setups. The immediate charts show the overall view of the trade setups.

straddle trade SBGL#2osc SBGL#3 with vol

19/10/14 – The first part of this potential Straddle trade is the Setup of the Long “With Trend” trade and as mentioned above there are 8/9 indicators in the green for this potential trade. The price currently finding strong support at the Fibonacci 0.5 retracement level taken between Wave 2 and Wave 3. Furthermore the TJ’s Ellipse is also holding as support at this same level. A conservative entry is required for this trade just above the Fibonacci 0.25 retracement line and above the highs of the last eight bars (weeks) with the Stop BUY order @ 9.60. The Stop Loss @ 7.80, which is below the Fibonacci 0.5 retracement level and below the Wave 4 Low.  The initial Take profit Limit Order is @13.00 giving a Risk to reward profile of over 1:1.6 .  Chart as Below for this Long Setup as part of the Straddle trade.

straddle trade

 19/10/14 – The second part of this potential Straddle Trade is the Short Setup.  A Double Top has formed for this SBGL -NYSE stock on the Weekly chart with the following strong indicators that a possible Trend reversal to the downside is imminent; 1. Prior  Bullish Trend was strong and formed the first peak of the Double Top after a more then 3 months. 2. After the first Peak the decline took place  of approx 20% of the first Peaks price to form a Trough. 3. The Second Peak was formed when the Price found resistance at the First Peaks High (with 3%) with the time between peaks in the normal zone of being 1-3 months and the Volume being lower or average compared to the first peak formation. 4. The Decline from this Second peak has seen a consistent increase in volume showing that a forceful test of the previous support line is imminent.  For this setup I am looking for the increased volume to break through the support level and would look for a target price at the previous Bullish Trends Wave 2 price.  Stop Sell @ 7.77 which is some 9% lower than the low of the current Support Level and below the Fibonaaci 0.5 level by some $0.08.  The Stop Loss is @ 9.26, which is above the Highs of the last 6 bars (weeks).  The initial Take Profit Limit Order is @ 4.39, which is the Level of the Wave 2 Pivot in the previous Bullish Trend.  Chart as Below for the Short trade within the overall Straddle Trade setup.

straddle trade

01/11/14 – The first Trade order for this Straddle Trade has triggered, with the Short Trade being entered  during Friday’s session.  Last weeks bar was a strong move down with high volume to break the neckline of the Double top setup for this SBGL-NYSE stock.  The price closed near the low of the week which should indicate momentum to the downside for this stock to continue into next week. The initial target for this Short part of the straddle trade is 4.50 and I will consider cancelling the Stop Buy order half of this Straddle trade if momentum continues down and breaks through the Fib 0.618 retracement taken between the previous Wave 2 and Wave 3, as this would signify that the y setup rules for a with trend trade of the 5th wave.  Chart as Below

straddle trade

29/11/14 – The Bearish movement of the main straddle trade for this SBGL-NYSE had a good Bearish week, regaining ground lost the previous week.  This is the first Scalp on this Stock  and was my 3rd Scalp of Friday’s session with CMG-NYSE and AKS-NYSE . As with my Short Scalp on AKS today, this SBGL stock price fell sharply from the open bell then pulled back slightly and similarly there were signs of exhaustion in this pull back from 11.00 m to 11.20 am.  At 11:25 am a Bearish Engulfing, Double Candle pattern formed indicating a reversal back to the original bearish movement for the day was imminent. I decided on an entry below the low of the days session @ 6.98 s that would indicate a strong potential for further Bearish price action. The Stop Loss was placed @ 7.05 just above the high of the Bearish Engulfing candle and two previous Doji’s during this exhaustion phase.  Take profit Limit order set @ 6.87 giving my standard Risk to Reward Ratio of 1:1.6.  The trade triggered at 11.30 am and then closed out at 12.05 pm, giving a quick 1.6% profit on my trading account balance and as this was the first scalp on this main trade, it is now Risk free.  If the bearish momentum continues, I will be looking for more Scalps over the next few weeks.  Chart as below.

SBGL Scalp#1

02/12/14 – This Short Straddle trade for SBGL is proving to be very reactive to the Gold price fluctuations and so it is prime for Scalping at this time.  This second Scalp setup very well with a Bearish Inverted Hammer Double Candlestick pattern forming after the price rose up to close the gap from the open of the session.  This also occurred at the same time s the Stochastic crossed over in the Over Bought zone against a False Bar Stochastic indicting the strong potential of the price action returning to the overall bearish trend.  the only issue was an entry strategy for this scalp as the very long green Bullish candle forming the first half of the Bearish Inverted hammer pattern didn’t allow for this.  The Candle after the Inverted Hammer gave me an opportunity as the price action wasn’t large and the low of this candle would be a good entry point.  At 11.10 am,on the very next candle,  I entered the trade  @7.19 with a tight stop loss just above the Inverted hammer candle.  Again, as this was a more mature main trade and a strong setup I wanted to increase my average win percentage profit, so I placed the Take profit Limit order @ 7.05. At 12:30 pm I placed a trailing Stop @7.12 to lock in profit as an indecision candle formed.  The very next candle at 12:35 pm took out my Take profit Limit order giving a 2% profit on my trading account balance. My first attempt at higher profit on CMG-NYSE didn’t quite work, but this trade did and so I will continue with this strategy of using aggressive trailing stops to protect profits with the aim of achieving 2% profit on the majority of my scalp trades.  Chart as Below.

SBGL Scalp#2

18/01/15 – The Short part of my Straddle Trade on SBGL took out its stop loss at the beginning of the week to give a 1% loss on my trading account balance.  At the same time my Long Straddle Trade triggered and has made positive progress over the week to finish near the weekly high.  This has been helped by the strong move up in the gold price.  My main aim is to level off the loss from the main Short trade and add to my successful Scalp trades on this stock if the momentum continues next week. So the entry point was @9.25 with the Stop Loss slightly adjusted from my original price to 7.76.  Chat as Below for the Updates to this Straddle Trade on SBGL.

straddle trade

23/01/15 – Another Scalp during this straddle trade on SBGL, but this time with a Long trade in the very strong Bullish direction this stock is moving in.  At 09:50 the first Bullish Harami formed but the wick of the candle was way too long for a decent setup.  However, after a short range bound period a second and more standard Bullish Harami formed, which with the MACD Histogram profile just bout to cross the zero line was enough for me to put in an entry @11.01 with the Stop Loss just below the Pivot B @ 10.91.  I chose this position for the stop loss s was the Pivot B was the first half of the Bullish Harami and a sensible support level if the price broke out. The same first Red Bar of this Bullish Harami was used to calculate the entry level, just $0.01 above that high. At 10;15 the trade was entered with a strong bullish move.  At 10:35 the price broke through the 1.6% profit line but formed a red Candle so I placed my Trailing Stop ‘ 11.11, locking in 1% profit. At 10:45 the price broke through the 2% profit line, but again formed a Red candle so I was even more aggressive and adjusted my Trailing Stop to 11.17, just below the low of that candle. on the very next candle I was taken out of the trade giving a 1.6% profit on my trading account balance.  Chart as Below for this scalp during my straddle trade on SBGL.

SBGL Scalp # 3

25/01/15 – A Wave 5 high was formed on this Long half of the straddle trade on SBGL in lst weeks session but the price suffered towrds the end of the week with the Sellers getting the better hand s the Gold Price suffered.  I have been in this series of trades for SBGL for quite some time now with mediocre success, so now is the time to lock profits aggressively.  I have placed a Trailing Stop @ 10.36 which is just below the low of last week and locks in 0.75% profit on my trading account balance.  If the Gold price continues to pul back next week then this stock price may follow suit and I’m not interest in riding the price down below the low of last week.  Chart as below.

SBGL #8

27/01/15 – My Trailing Stop was taken out in yesterday’s session giving a 0.75% profit on my trading account balance.  This was not a normal Straddle Trade and I found it more difficult to manage as on the longer , weekly, time frame and the stock as very reactive to the gold price.  The trading activity for this SGBL was over a 3 month period giving a Net profit of 3.95% on my trading account balance which is ok but trades on Daily time frames give me similar returns in less than a month so I will think twice on entering this type of straddle trade on a weekly time frame in the future. Chart as Below

SBGL#9

paul.bratby@hotmail.com'

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