May 9, 2011

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

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Let’s begin our morning routine with the economic news for today’s trading session.

8:20 Gold & Currencies OPEN

9:00 Crude Oil OPEN

9:30 US Market OPEN

10:30 E-mini Reversal

11:00 Transition into Lunch

11:30 European Close / Live Webinar in our Trade Room

Looking at the news this morning we dont have much to watch. With Mother’s Day on Sunday over the weekend it will be interesting to see how the speed of the market looks at 830am today.

As always, I’m 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.

My trading method will work on ANY liquid market, here is what I’m focused on day trading today:

Crude Oil Futures

Lets begin our week on Crude Oil getting our mind cleared of anything from last week, so I will begin with a slower timeframe to get my focus on the most important information FIRST this morning.

Crude Oil 89Range

Open your 89range chart and you can see the following:

New Price Wedge in Pink trend lines
Sideways Trading Range in the white box
Major Levels of Support and Resistance above/below price

This slower timeframe focuses my eyes on the most important information so that now I can zoom in on a faster chart for the most specific price levels to use.

Open your 34range chart and you see the following:

Trading around the BIG Round number of 100.00, which is in the middle of the wedge
In the middle of the Price Wedge in Pink trend lines
PHOD is above us, PLOD is below us
OPEN in the center of the Wedge
BMT Line in the middle of the wedge

Crude Oil 34Range

This information gives me plently of opportunity to profit from this market this morning.

The first thing we see is the Big round number 100.00 which is the grand daddy of ALL BRN’s, and its right in the middle of the wedge. I will want to get FAR AWAY from this 100.00 level, and since it is in the middle of the wedge it is even more important we avoid this area.

I marked up the price wedge on my 89range chart using some swing highs and swing lows, and you can see this wedge, we are in the middle. I want to wait and trade the highs and the lows of the wedge.

The PHOD / PLOD are both above/below the current price, which means we are trading inside the range from friday, making this an Inside Trading Day, which means I will be using our trading ranges first, then looking for breakouts second. Sell the highs and buy the lows.

Lastly, remember I want to avoid trading around the Big Money Trigger Line (BMT) and the OPEN, which are also both in the middle of this price wedge.

My plan of attack on crude oil will be as follows:

If price rises im selling the high of day @ 100.69, selling the highs of the wedge around 101.60-102.00, sell the PHOD around 102.50

If prices fall im avoiding the BMT and the OPEN. Im buying the Low of Day at 98.54, buying the lows of the wdge at 97.51-97.00 and buying the PLOD down around 94.50

Remember to follow this simple rule..

Buy the lows, sell the highs, and avoid the middle

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