E-mini Russell & Crude Oil Day Trading Strategy using Dollar Index Correlation

830am EST

– Im using the 13-range chart on the dollar index futures and we can see the following:

o Market is indeed moving, but it may be trading sideways after those moves earlier this morning, we will wait and see.

o Inside day = trading inside the range from yesterday, and it usually means consolidation in other markets we want to trade, so be careful

 Go back through your notes, and I think you’ll find that inside day’s on the dollar tend to be your losing days or your breakeven days, or maybe just your ‘why did I trade today ?’ days.

 Wait for better speed
 Watch your average true range, looking for rising ATR to feel more confident with trades
 Look for more confirmation on different timeframes

o Top of the bearish channel = overhead resistance on the dollar = support on other markets.

 Support on other markets = things should be expected to rise

 Your highest percentage trades will be LONG today, so look for good opportunities to buy the bounce off support or trade the breakout to the long side.

900am EST

– Crude oil pit opens at 900am EST so expect some volume to enter the market.
– We open our 34-range chart of crude oil futures and we see the following

o Top of the bullish channel, so sell the highs

o Sideways trading range from the top of the channel at 81.74 down to 80.77, 80.58, and 80.45 where we will look to buy the lows

o If we breakout to the upside I need to clear above the big round number of 82.00 first

o If we breakout to the downside I need to clear below the trend line, and then I can sell the highs below 80.45.

– We will trade the crude oil market like any other sideways range, buy the lows and sell the highs.

– We open our faster timeframe on the crude oil futures and the 4range chart shows us trading at the lows of the bullish (narrow) channel.

o We want to buy these lows of the channel, so scalpers are looking for buying opportunities.

930am EST

– We open the 21-range chart on gold futures and we can see trading at the highs a sideways range, which gives us plenty of trading opportunities:

o Sell the highs on the way down of 17.5, 15.2, 13.4, and 11.1

o Buy the lows on the way back up at 15.2, 13.4, 11.0 and don’t forget the lows of the channel and the trend line as support at 1307.9.

– Gold futures are trading very narrow, sluggish and sideways on the fast timeframe 4-range chart

1015am EST

– We’re watching very slow and sluggish charts right now.

– The dollar index futures are trading sideways and VERY slowly, which is causing the rest of the markets to do the same.

– The mini Russell futures do not have any trades setting up for the time being, so lets look at slower timeframes to plan for the future.

– If the Russell rises we’re looking to buy the breakout above 79.7 with profit target of 80.5, 82.5, and 83.2 at the highs of the trading range.

– If the Russell falls, im looking to enter short below 72.5 with targets of 71.3, 69.3, and all the way to the lows of 64.5 for the final target.

– Crude oil futures are also trading sideways at the highs so we have a options right now.

– If we can break above 82.05 we can buy the lows of this channel pattern with targets of 22, 33, and then the highs of 63

– If the crude oil falls below 82.00 we need to wait patiently for the open of the day 81.31 and then look short below 81.26 because that is the earliest point where we have enough room for this trade to move for us.

– Entering short below 81.52 is another option, but seeing the chart this will be higher risk. Im going to look for entry below 26 for the highest percentage opportunity on this day trade.

– We use a faster timeframe chart to see where our next trade on the crude oil will be

o 4-range chart shows a sideways trading range from 82.38 down to 81.52
o Buy the lows of 52
o Sell the highs of 38
o And keep an eye out for the breakout above or below this trading range.
o Scalpers will use the same trade management for every trade they take

 5/10/Runner

Example of a Fast Track Success Story:

– 130range chart
– 20tick stop and 20 tick target
– Breaker and 2-step patterns