January 11, 2011
- in Uncategorized by schooloftrade
Buying Pullbacks Earns big profit day trading crude oil and gold futures with dollar index
820am EST
Check the dollar index first:
– Daily chart shows us at the highs of the sideways range, in the same spot from Monday (sell the highs) so we expect the dollar to try and drop
– Dropping dollar = rising markets
– We posted on the blog this morning our focus on the support level of 81.000
– We held the 81.00 which confirms the dollar is trading sideways (sideways markets are expected on gold, crude, Russell, euro, etc)
– Average true range on the dollar index is dropping from a lack-luster level from earlier this morning.
– Be careful when the ATR is low and dropping on the dollar
– Speed of the tape (pace of tape indicator) is red and very slow
900am est
– We’ve taken two trades today
– First trade buying the breakout was a scratch
– Second trade wave long was a loss because momentum did not confirm on the 21r and 13r charts
– We also had a trend line that made the price action very sloppy on the 13range chart, resulting in a losing trade.
– We then waited for the 21range momentum to confirm, we got back into the market on big money buyers and took a winning trade to make the money right back.
945Am est
– We dug ourselves out of the small hole this morning with a wave failure pattern on the 34 range chart.
– We’ve now broken the 34range support, we see a 2-top at the highs, and we’re looking to sell these highs
– One problem: now we’re at the LOD, so we want to buy the lows…so we wait.
– Don’t sell into the LOD, wait for the LOD to break, then sell the retracement
1030am est
– Gold futures are slowing down tremendously
– We have 90 ticks of profit so we have plenty of room to breathe, but the markets are slow and sluggish so we need to wait for better speed and potentially the dollar to break out of this sideways range.
– Gold resting at the LOD and has overhead resistance to keep it sitting there quietly. We will take a wave failure above 1377.7, or look for another short entry by selling a retracement when we break the lows of the day.
1045AM EST
– Took a higher risk trade that was made even higher risk because I missed the trigger line as support for the short trade
– Took a full stop, this is my 2nd loss of the day, so I need to step back and take a look at my trading
– 2 ways to take a loss, and how I lose a trade will determine whether I continue to trade or not
– 2 ways to lose money
o 1: you make a poor trading decision
o 2.: you are trading a market that is not acting normally today
– After my 2nd loss of the day, let’s look at them and decide if im able to continue trading with the mental and physical focus that I need to see success.
– THE two losses were MY FAULT, I didn’t follow my rules. This gives me confidence that this market is still ok, I just need to be more selective.
– The losses did NOT come back to back, if they did, I would be sitting on my hands or trading on the demo account.
– I take full responsibility for y trades winners and losers, so what do I do now?
– These losses came after taking big winners, so let’s be patient and lets try to follow those rules.
1100am EST
– Looking for the transition into lunch
o Dropping average true range
o Slow speed
o Fewer big money traders
o Lagging momentum
