September 7, 2011
- in Uncategorized by schooloftrade
Price Structure clues trading Gold, Crude Oil and Russell Futures
The first thing I need to do is remind myself that today is best spent getting back into the routine I left last week when i went on vacation.
Lets also remember that the news from Swiss overnight will not affect our day trading anything more than what we already know.
How do we trade the REACTION to this major news that came out?
– Watching for market personality
– Using our entry rules
– Looking for the best locations
Keep it simple and we are going to stick to what works, not what we think we need for the news overnight.
Our support is back from break, they will be back here at 10am est.
Support@SchoolOfTrade.com / Skype: SupportSOT
Next training is on Wednesday @ 1130am est we will be going ALL of the new indicators.
830am est
This is expected to be a transitional week, we will see more volume as the days develop into this week.
End of the week we have more news and we will have more people back from their last long weekend of the summer.
“Hurry up and wait today”
Not much major news, we can assume many traders hit the snooze button a few times today, and we can use this time to our advantage, or as a liability.
We can over-trade this morning and make a bad spot even worse, or we can ‘ease’ into your day and week and build that confidence back where it needs to be.
We don’t have scheduled news for today outside of 10am, so we need to keep our eyes and ears open for comments out of the Fed, ECB, White House, etc.
930am est
Crude Oil Futures give us easy clues from 3 price structures this morning:
– Price Wedge
– Bull Price Channel
Price Wedge tells us a very specific market personality.
Lower highs and higher lows is called ‘consolidation’ and that occurs when the market participants are searching for clues for future direction.
In other words, a wedge pattern tells us the traders don’t see value higher or lower, so they are waiting for news, something to spark the next move.
We trade a wedge the same way we trade an inside day or a sideways range, sell the highs, buy the lows, and avoid the middle.
At some point there will be a potential breakout of the wedge.
We expect fake-out breakouts at the highs and the lows of the wedge, until we break above resistance overhead or support below the wedge.
Im buying pullbacks when we break through overhead resistance and selling retracements when we break support below.
Inside day tells us to trade INSIDE the range we are currently in.
Inside day tells me the opinion of value is the SAME from one day to the next.
If we break above or below the previous day’s range we then can assume the opinion of value has changed.
We buy the PLOD and we sell the PHOD on an inside day. We also look to sell at the next level of resistance and buy at the next level of support.
We do not expect to see many successful breakouts on an inside day, so look for the Fake-Out Breakout when price is inside the range from yesterday.
If price breaks above the PHOD we buy pullbacks, and if it breaks below the PLOD we sell retracements.
We then use a faster 34range chart to plan our attack on crude oil:
– As prices rises I’m selling overhead resistance first, and then buying pullbacks carefully, avoiding the fake-out breakouts
– As price falls im buying at support first, then selling retracements with new lower lows, being cautious to avoid the fake-out breakouts
– As price rises im selling the 84.93, 85.00, 85.32, 85.39. and the PHOD 85.84
– As price makes new highs above those levels I can then consider buying a pullback assuming my entry rules confirm.
– As price falls im buying 83.45, 83.29 and the PLOD 83.20
– Im selling the highs of the wedge
– Buying the lows of the wedge
– If price breaks below 83.00 we are then at the highs of the narrow wedge below me, so looking to sell, but beware the narrow portion of the wedge below you will be too narrow to make profit from selling the highs and taking profit at the lows.
1000am est
Market Personality is still very sloppy. Price Wedges and Inside Day’s across the board make for easy trades short at the highs and longs at the lows.
“Days like today remind us to FADE the breakouts”
As price rises we sell and as price falls we buy.
Gold Futures have 3 distinct price structures:
– Sideways Range
– Price Wedge
– Inside Day
Sideways Ranges are another easy opportunity to use a very simple plan of attack
We want to sell the highs, buy the lows, and avoid the middles of sideways ranges.
There are 3 Phases to every sideways range, and we need to be aware of these when we trade them.
As price falls I’m buying at support of the range, and as price rises I’m selling at resistance in the range. In the middle of the range I sit on my hands and wait for the highs or the lows to be tested.
If we break out of the sideways range we buy pullbacks with new higher highs, and we sell retracements with new lower lows.
We use the faster timeframe 34range chart to find the specific plan of attack:
1100am est
We have to beware trading late in the morning today because of this lack of news and a transitional day in the markets as traders return from break.
Lets locate the highest % trades for the rest of the day so we can focus on those only.
Crude Oil has a price wedge and inside day, so selling the highs, buying the lows, and avoiding the middle will be our plan of attack.
Sell as price rises to 84.73, 85.00, 85.47
If price makes new higher highs, I am suspicious of the fake-out breakout.
If price falls I’m buying the support levels at 83.71, 83.45, 83.20 PLOD.
Gold futures are in a similar situation, so buy the lows and sell the highs.
If price breaks below the PLOD we can sell retracements, but take care because they are selling into the lows of the wedge.
I want to be buying as price makes new lows, buying the PLOD, and buying support below the lows at 77.5, 1861.8 and the wedge lows.
Gold fails to break above the PLOD and therefore now the sellers are in control and we sell retracements with new lower lows.
BEWARE on gold NOT to sell into the major support levels (89r, wedge lows, etc)
Russell Futures are showing us three price structures which give me clues for our next trade opportunities:
– Inside Day
– Sideways Range
– Price Wedge
I know to buy the lows, sell the highs, avoid middles.
As price rises I’m selling 674.2 and 676.7 and PHOD 676.0. if price makes a new higher high i will then buy a pullback (now an outside day)
As prices fall I’m buying the lows of wedge and 657.7, 659.2 PLOD as support. If price makes new lower lows we then look to sell retracements.
Targets above us are the BMT 689.4 and below us the next major support at 646.8
always turn OFF the Auto-Scale Feature and always turn OFF the Calculated on Bar Close.
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