October 11, 2011
- in Uncategorized by schooloftrade
Favorite day trading strategy after Holiday Weekend; Goal hit Crude oil & Russell futures
First day back after a long weekend, day traders will be getting back to their desks and starting their week’s a little slower than usual with Monday as a holiday.
The first thing traders do this morning is get back into their routine’s and with no major news this morning we don’t have a lot to expect as far as news catalysts go, so anything can happen.
We don’t have any major US news this morning on the calendar and all we have is 815am Housing Starts out of CAD, which will affect crude oil futures.
Our day begins with 815am CAD news, we will watch the CRUDE OIL contract closely for opportunities after that news is released. Later in the morning we have our 930am US Open, followed by the 1030am Reversal, 1100am Transition into lunch, and of course the 1130am European close. We will wait through 1130am to see if volume persists, and if we don’t see any market personality we will stop for the morning and wait for better price action.
815am EST
Dollar Index trading sideways this morning, and day traders are using the short term trend on the DX 12-11 contract.
· Swing Traders will use the long term trend (daily charts, 89range)
· Scalpers would use a much faster timeframe such as the 144 tick chart.
Day Traders, Position Traders will use intra-day timeframes on the DX to look for the correlation during the day.
The key to using the Dollar Index is RIGHT NOW. What’s happening on the dollar…NOW…not 5 minutes ago, or even 5 second ago…its RIGHT NOW.
· Downtrend = buying opportunities
· Uptrend = selling opportunities
· No trend = both directions are ok
If the dollar is in a downtrend, the high-percentage trades will be the long side, and the higher risk trades to the short side.
820am EST
We have a sideways trend on the dollar index, which means we do NOT have a directional bias to work with. This can easily change, so use your 13range chart on the dollar to keep an eye out for higher highs or lower lows to signal the change in this short term trend.
835am EST
Euro currency futures trading with three price structures:
– Bear price channel
– Price wedge
– Inside day
Bear price channel says to sell as the higher percentage trade this morning, sell the highs of the price channel and the resistance above the price channel highs.
Price wedge tells me to buy the lows, sell the highs and avoid the middle of the price wedge.
Inside day says much of the same, buy the PLOD as support, sell the PHOD as resistance, and avoid the middle of the range. If price makes new higher-highs above PHOD we buy pullback, and if price makes new lower-lows below PLOD we sell retracements.
845am EST
The us dollar index makes a new higher-highs but quickly comes back down into the range below it, and there isn’t enough personality right now to warrant looking for a pattern.
My plan of attack on the Euro is as follows…
If price rises I’m selling the highs of the bear price channel, the PHOD 1.3690 and the price wedge highs around 1.3667 and 1.3622.
If price moves above the PHOD I will first look for the fake-out breakout to sell the failure at the highs, and then if the buyers are strong enough to keep price moving higher I will then buy a pullback with the final target up at 1.3791 the next major resistance level overhead.
If price falls (dx makes new higher-highs) I’m selling new lower-lows with retracements, keeping an eye out for this bear price channel not to sell into those lows.
I will buy at support as price falls buying 1.3500 price wedge lows and PLOD 1.3447 as major support first. If we break new lower-lows below .47’s we then will look for the fake-out breakouts to the downside first, seeing if we cant get the sellers to fail and then buy above PLOD as the failure, or if the sellers are too strong we then sell new lower-lows with retracements below the PLOD 1.3447 down to the next final target of 1.3353. I will then buy the support at 1.3353 and repeat the same process with new lower-lows.
930am EST
Market personality has been the biggest factor so far this morning, ie, there is none.
The dollar jumped higher, only to come back down shortly thereafter, and the rest of the markets are following suit.
Crude oil futures are giving us some busy charts to work with this morning, lots of things going on we need to be prepared for.
Our price structures on crude oil are:
– Inside Day (middle)
– Price Wedge
– Bear Price channel (major)
– Bull price channel (minor)
With the price wedge and inside day together we expect to see fake-out breakouts with new higher-highs or lower-lows.
The price channel’s give us some easy entry locations for our trades this morning, as well as a bias to the direction of those trades.
If price rises I’m selling the highs of the bear price channel around 85.00, sell the resistance above the price channel highs at 85.25, avoid the open 85.29 and then sell the resistance at 85.55 overhead.
If price keeps going higher than 85.55 HOD we will look for the fake-out breakout first, and then if the buyers really have control I will then buy pullbacks up to the next level of resistance at PHOD 86.09. I will sell the PHOD 86.09 as resistance and then look for the fake-out breakout with new higher-highs. If buyers are too strong then I will buy a pullback with new higher-highs above PHOD
10:15am EST
Dollar index is failing with new higher-highs and then failing with new lower-lows. We can tell this market’s personality is just like the us dollar index this morning, so keep that in mind.
If the dollar cant make new higher-highs than the crude oil futures and euro currency futures will have the same problem in the opposite direction.
1105am EST
Market personality has been sloppy all morning, and our highest percentage trades today came in very small batches.
After 11am EST I want to wait for 1130am and the European close and see if we get better price action afterwards. Right now lets plan where our next high percentage trades will be.
Crude oil futures trading sideways just above the price channel highs, so we have a few options.
If price rises I’m selling the next resistance level overhead. If price falls to new lower-lows I will sell below 84.85 support trying to sell the highs of the bear price channel.
The dollar index is trading at the LOWS of the sideways range, so we should expect the dollar to rise off these lows.
