Day Trading Strategies for Euro and crude oil futures

We began the day this morning with a simple day trading
strategy;  be careful trading around the
early-morning ADP employment report, and then be ready for news on crude oil
later in the morning.

We began the day with
some easy clues from both of these markets, including the Russell.  First, Euro futures were trading in a price
wedge but we had to be aware that the lows of the price channel were right
around those highs of the price wedge so we assumed it may be a little sloppy
and it certainly was.  Second, crude oil
was trading in a very sloppy personality in the middle of its price wedge and
ahead of such important news at 1030am EST this morning we had to take that as
a sign of things to be concerned about. 
And finally, the biggest clue today was from the dollar index which had
the sloppiest personality we’ve seen in a week! 
The DOLLAR INDEX told us to be very careful this morning, and it really
never start moving until this afternoon which kept most of our day trading
opportunities at bay.

We began our day
trading off the lows of the price wedge with crude oil as the sellers failed to
break new lower-lows.  The price action
on crude oil was so poor early this morning that we quickly saw this as being a
risky market until we got the dollar index to start moving with more consistently.

Our day trading
strategy for the Euro futures was very simple;  sell the highs of the price wedge and be
aware that it may be sloppy moving off the highs because of the price channel
lows that were still lingering from Tuesday this week.  We needed the dollar index to make it easier
on us, rising off the lows of the price channel, but it never made move in the
US morning session so it kept the Euro futures very contained.

Our first trade on
Euro futures went along with our trading strategy from 730am, it was short
selling the highs of the price wedge, which was an easy winning trade, but
didn’t go as far down as we wanted, which was a BIG clue.  The sellers were there at the highs, but they
FAILED to push price lower and that told us to look for buyers to enter, giving
us the opportunity to take a very high percentage pattern we call the wave.

Our second and third
trades today used our day trading strategy, but made a small change to it when
we saw the sellers fail at the highs of the price wedge.  The 21-Range charts are some of our
favorites, and we used the wave pattern on this 21-range chart to help us buy
at support and take our profit at the highs of the price wedge.  This was an example of a perfect pattern
(wave) that occurred at a not-so-perfect location (at the price wedge highs) so
we called it higher risk and took the trade based on the confidence we have in
our 21-range wave patterns.  Job well
done.

Later in the morning
we got the opportunity to execute our day trading strategy for crude oil
futures.  We had to wait until after
the inventories report came out higher than expected which suggested price
wedge should move lower.  The big concern
we had after 1030am EST was that the news was telling us to sell, but as you
can see from the chart posted below, our trading strategy at that time was
looking to BUY the lows of the price wedge. 
This made for some tough decisions on our part, and also resulted in
sloppy trading around the price wedge lows. 

I tried to sell
retracements on crude oil twice as we made new lower-lows however the buyers
were too strong at the lows of the price wedge. 
Another example of how the technical pattern (in this case the price
wedge) was more important than the fundamental news released less than 10
minutes prior.  After trying twice to
sell at the lows and seeing the sellers fail I got long using a Fast Track
Method trading strategy and made some money buying the lows.

We finished the day with a lot of learning lessons
today.  First, don’t sell those lows of
the price wedge, Second, remember to wait for the dollar index to move cleanly,
if you don’t you are asking for trouble. 
And third, remember to always consider the larger price channel when
looking to trade a price wedge, Euro futures were a great example of that
today.

Did you miss the action
today?  Come join me again tomorrow @
730am EST when we post our morning prep and open our live trade room for our
lifetime members and trial-guests.  We’ve
had an amazing 2012 so far and we look forward to seeing you with us tomorrow!