April 12, 2011
- in Uncategorized by schooloftrade
Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures
‘We are what we repeatedly do. Excellence, therefore, is not an act, but a habit’ – Aristotle
Let’s begin our morning routine with the economic news for today’s trading session.
8:20 Gold & Currencies OPEN
8:30 International Trade
9:00 Crude Oil OPEN
9:30 US Market OPEN
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
2:00pm Treasury Budget
Looking at today’s economic news reports we can see early reports at 830am that will hopefully add volume to this early-morning market. If we dont get volume at 830am we may have to be very careful with low speed becasue we have news @ 2pm this afternoon regarding our treasury budget. We can assume that traders will be leaving the market early this morning to wait for this news report to be released, so we dont think to see a Golden Lunch.
As always, im watching the speed or the orders coming into the market along with average true range (ATR) to find the best times to trade the markets today.
Lets take a look at the markets we’re trading today…
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| Gold 34Range |
Gold Futures dropped off the highs from late last week and, we had a very sideways day on Monday, and we’re hoping this market will give us some more opportunities today.
Open your 34range chart and you can see the following:
- Price Wedge in Yellow trend lines
- Sideways Market in the white box
- PHOD and PLOD
- Dollar Trend
The first thing I notice on this chart of gold futures is the price Wedge Pattern. This is always something I look forward to trading, but today this is looking very narrow.
Wide wedges are great, you can sell the highs and buy the lows, just like we did on crude oil on Monday, but this wedge looks a little more challenging because there is NOT a lot of range from top to bottom of the wedge. With that said, trade this carefully today, avoiding the MIDDLE.
Then I notice the sideways range developing which I marked in the white box. Notice this also contains the PHOD and PLOD, which makes today an Inside Trading Day.
Sideways markets are easy to trade. Buy the lows, sell the highs, and avoid the middle. I also want to use the PHOD and PLOD as excellent trading areas for today.
and lastly, take a look at the Dollar Index Futures and you see a sideways range on the dollar, which will likely correlate to sideways range on gold as well. Look for the Dollar Index Futures Correlation to be your guide on gold futures today.
In review, my plan of attack on gold will be:
- If price rises im selling the highs of the wedge
- if price rises im selling 1465.7 and then selling 1469.9
- If prices rise I will also buy pullbacks when we break new higher highs, i will not buy the highs
- If price falls I will buy the lows of the wedge first
- If price falls I will buy support at 1454.7, buy support at 1453.7, 1447.8
- If price falls I will see retracements as new lower lows are made, never selling the lows.
Crude Oil Futures
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| Crude Oil 34Range |
Crude Oil, a lot like Gold, comes off the highs from late last week and settles into a nice price pattern for us to use in today’s session.
Open our 34range on crude oil and we see the following:
- Price wedge
- Sideways Range in the white box
- Bearish Price Channel
- PHOD and PLOD
- Major Support @ 106.00 below us
Trading a price wedge is quite simple, buy the lows and sell the highs, avoiding the middle. We reviewed the 6 high % trades using a wedge.
The sideways range also includes the PHOD and PLOD, making this an inside trading day, which tells us that NOTHING HAS CHANGED from one day to the next. This MAY mean challenging price action today, but its not certain yet, so lets be patient.
Possibly, the most important thing will be the bearish price channel. This tells us the sellers are in control in the long term, and we may see the larger moves to the sell side.
In review, my plan of attack on crude oil today:
- Looking at the selling opportunities to be higher % with this bearish channel, so look to sell at resistance as price rises.
- If price rises, im selling the highs of the wedge, selling the 110.0, 110.24, all the way up to selling the 111.0
- If price rises, im selling the High of Day @ 110.24
- If price rises I will also buy a pullback with new higher highs, never buying at the highs.
- if price falls im buying at support first, im buying the lows of the wedge
- if price falls im buyuing PLOD, the lows of the sideways range @ 107.50, im buying 107.00, and all the way down to buying support at 106.00
