Learn How To Trade Futures, Market Commentary

Market Content August 6, 2009

Today was another slow summer day for our trading, but we were able to scalp for some small profits, which is great considering these conditions. We also introduced one of our new indicators, the Pace of Tape indicator, which does exactly that, is quantitatively measures the speed at which prices are coming across the tape. Needless to say this was a great addition to the School of Trade; come check it out in our free trade room tomorrow! You can go to http://www.schooloftrade.com/ and sign up for a free 3 week trail. Now let’s review our trades for the day……

We noticed early this morning that volume seemed non-existent today and so we were very cautious in taking our trades. Our first trade did not occur until after the US Equities open at 9:30am EST, when we noticed a James Wave setting up to the short side on the Crude Oil (Symbol CL). Unfortunately the Wave set-up failed, so we were then able to look for our classic trend-reversal 2-step trade to the long side. We waited to enter this trade until we saw a clear sign that Crude Oil was going to break a line of support, and once it did we entered the market at 9:47am EST with a basis price of 71.45. We got out first target of +3 ticks almost instantly, but then the market changed its mind and scratched us out of the remaining two contracts for a profit of 3 ticks ($10/tick).

Our next trade occurred once again in the Crude Oil market (Symbol CL) at 10:10am EST. This time a James Wave to the long side had failed to keep its highs and the sellers took control of price giving us a great 2-step short. We were able to enter the market at a basis of 71.55 and got our first target of +3 ticks ($10/tick) before getting scratched out of the remaining two contracts. Although two trades of +3 ticks doesn’t seem like much, in these summer conditions small profits is what to expect, and this is fine as long as we keep our losses small as well, which we have proven able to do.

We finally took a break from the Crude Oil market (Symbol CL) and saw a set-up forming in the Gold market (Symbol GC). We saw a great long 2-step setting up in Gold and decided based off price action to enter the market at 10:18am EST with a basis of 965.8. It seemed almost instantly we had gotten our first two targets of +3 ticks and +6 ticks when we entered the trade, but we were unable to trail our stop on our third contract because price had not moved high enough for us to, so we closed out trade with a profit of 9 ticks ($10/tick).

The final trade of the day occurred at 10:40am EST on the Crude Oil (Symbol CL). We had to be patient and wait for this 2-step short to set-up because it had to break a dynamic level of support before we could take it. Once this happened we were able to enter the trade with a basis of 70.75, and got our first target of +3 ticks with ease. Our automatic trade management moved our stop to break-even, which is where we closed out our trade on our final two contracts, for a profit of 3 ticks ($10/tick).Today’s Trade Total’s 4 for 4 $180 in profits