March 1, 2011
- in Uncategorized by schooloftrade
Price Channel Strategy for Day Trading Crude Oil and Gold Futures
820am EST
– The dollar trades sideways in a narrow trading range just below the big round number of 77.000
– We’ve been watching this area on the dollar for 5 days at least.
– The speed is pretty slow this morning, but that can easily change
– Average true range shows lower highs (the better times aren’t that good) and lower lows (the bad times are really bad)
– This will be a big factor in the markets we trade this morning.
– Low ATR = narrow trading ranges = challenging price action.
– The dollar correlation reminds us to watch the DX where its moving RIGHT NOW.
– Rising dollar off support we need to be selling
– Falling dollar off resistance we want to be buying
830am est
– Crude oil futures are trading in the middle of the price wedge on the 55 range chart
– We know the dollar is very slow = concerns
– Now we see the crude oil in the middle = more concerns
– Lets be patient and wait for the price to move to the highs or the lows.
845am est
– We need to be patient still as the markets are very slow
– We have lots of 10am news, this may be the cause
– Lets plan our attack on crude oil while we wait
– If price falls..
– Buy support at the pink trend line, channel lows
– Buy support 97.00, and 96.82
– Buy 96.37
– If price breaks support, that level becomes resistance, and I will sell a retracement at resistance as price falls.
– If price rises…
– Sell resistance at 98.10, 98.27, and 98.48
– If price breaks above these resistance levels I will then look to buy a pullback.
– Think of these three simple rules:
o What was support becomes resistance when its broken
o Price rises im selling first, buying second
o Price falls im buying first, selling second
850am est
– Just like the morning prep said, the gold market has dropped off the new highs
– Lets look to buy at support, which is also the PHOD
925am est
– The markets are VERY sluggish still
– We see the dollar average true range is rising, this is good sign for things to come
– We focus on staying patient, reminding ourselves that in previous day’s the BEST trades didn’t come until later in the morning.
– Today’s price action is apparently waiting for more info from Bernanke @ 10am est.
1000AM EST
– Bernanke speaking live on TV about the budget, traders will definitely be watching
– Two pieces of news today at 10am
o ISM Manufacturing as expected
o Construction Spending FALLS
1020am est
– We have the 10am news behind us
– We took another fast track winner
– We hit our advanced method profit goal for the day of $1000usd on 4contracts
– We are almost to our FT method goal of 30 ticks today.
1050am est
– We’re 1 trade away from our profit goal on the fast track this morning
– We see gold at the highs of the channel
– We see gold with overbought and RED momentum indicator
– This tells us to be selling at the highs.
– If we do make new highs on gold I will be a seller first, and then look to buy a pullback using support if price keeps rising.
– We now see that the market personality is changing dramatically
– Very slow inconsistent speed
– Choppy highs and lows, narrow ranges
– Average true range on the dollar is dropping, gives us clues to the market is getting more narrow, making it harder to see wider.
– We then look at ATR on the crude oil and we see the very same thing, dropping, which means price on crude will be more challenging until the ATR rises again.
– This is a great tool for you to know when to STOP trading.
