April 4, 2011
- in Uncategorized by schooloftrade
Do NOT miss this high % day trade pattern next time!
800am est
– We open the 89range chart on crude oil futures and we see the following:
o Bullish price channel in orange trend lines, we are in the middle
o We also see a major price wedge in pink trend lines, and we have just broken the highs of the wedge, and possibly looking to enter back into the wedge from above.
o Look to sell the highs of the wedge below 106.00
o Right now we’re in the middle of the price channel, so we don’t have any swing trades setting up yet.
o The big picture we can see clearly on the 89range chart
o In the middle of the channel = anything can happen
o At the highs of the wedge, im looking for price to get SUCKED DOWN into the highs of the wedge.
o Bullish price channel does tell us that the better trades will be LONG this morning, but I need a faster timeframe to confirm the short term direction.
815am est
– We open our 34range chart of crude oil 0511 and we see more information:
o We’re above the 107.71 level from last week, so we marked that level with audio alert to remind me when the price drops below the 107.71
o Bullish price channel in green trend lines, and we are in the middle of this channel
o Buy the lows of the channel, buy the support below the channel if it breaks out.
o The bull-channel = higher % trades to the long side today
o We also see a short term sideways market from 108.78 down to 108.00
o We know to avoid the middle of the sideways market, and to sell the highs and buy the lows
830am est
– Still very slow in the markets this morning as they wake up on Monday morning
– We open our 89range chart of the gold futures and we see the following:
o Major bullish price channel in yellow trend lines
o Short term bearish price channel in orange trend lines
o Sideways range from 1450 down to 1411
– This SLOWER timeframe of gold futures removes the CHAOS from the market and allows me to focus on the most important aspects of our day ahead.
– In the case of gold, I need to be aware of my surroundings, inside the sideways range we can buy OR sell, just know WHERE.
845am est
– We see the sideways range on gold futures, and we know the best ways to trade this sideways range
o Bullish channel tells us to buy the support levels first, as the highest % opportunities
o Sell the highs and buy the lows
o Avoid the middle of the range
o If prices keep rising buy pullbacks
o If prices keep falling to new lows, sll retracements
915AM est
– We see the slow and sideways dollar index is the reason why these markets are slopping around right now
– With no news today, and ben Bernanke on the mic later tonight, we need to wait for the FASTEST times of the morning to take the best opportunities.
945AM est
– We’re looking at the BIG PICTURE on the crude oil 34range chart and we see the following:
– At the lows of the price channel, buy the lows
– At the lows of the previous trading range
– At the PLOD, above the PLOD the buyers are back in control
– We tested and HELD at the 107.71 level
– We also have the dollar index getting ready to make new lower lows as well.
– Low volume on the dollar index may cause concern over the dollar correlation, but buying the lows, buying at support are plenty of compensating factors.
1015am
– We took the VERY high % trade short on the crude oil futures for our biggest winner of the day
– We have a bearish channel, and se we sold the highs overhead and tried to get the price back down to the LOD
– We saw the speed slow down at the lows fo the channel, so we took profit when the speed slowed down.
– The LOD on crude oil NEVER tested when it finished its move, this is a BULLISH signal
– Think of where we are
o Not at the lows
o Not at the highs
o Above the Bearish Channel
o Below the bullish channel
o Right at the big money trigger line on the 13range chart
o BMT = profit target, not your entry location, so beware.
o Lots of red flags go up right now when looking to trade crude oil.
– When things are slow and sluggish, now is the best time to be preparing for our next trade.
– What if price rises on crude oil?
o Sell 108.00 using the PLOD and the trend line as resistance to protect the trade
o I will also buy a pullback above 108.0 using the lows of the channel to support my trade.
– What if price falls on crude oil?
o Buy 107.58 as support
o Sell retracement below 107.58 if we see new lows
o Buy 107.34 as support if price keeps dropping
1030am est
– We took the wave long above 108.00 just as we planned earlier this morning for a winning trade
– We now see the Crude and the Gold futures have FAILED to test their LOD’s/HOD’s
– This shows us BULLISH sentiment in crude oil
– This shows us bearish sentiment on gold
1115am est
– We continue to follow our entry rules
– Buy the lows and sell the highs
– Use the PLOD as your line in the sand between buyers and sellers
– Things are slow right now as we wait for the European market close
– We see more volume @ 1130am than we do at 1115am most often, so lets be patient.
– Dollar average true range = rising, which gives us more confidence in getting a few more patterns today
– Dollar speed is slow
– Let’s review our favorite markets and see where we’re going next.
