November 8, 2011
- in Uncategorized by schooloftrade
Dollar index day trading strategy uses Mini-Russell to profit
Today’s day trading strategy was built around two main aspects; the dollar index correlation and the lack of major news this morning. The best day trading strategies always have both fundamental (news) and technical (dollar index) to work with.
Anytime we don’t have major news we know the markets will be a little weaker than if they had some economic news to get them moving higher or lower with ‘personality’. This morning we were dealing with our 2nd day of no major news, and we knew that was going to be a factor.
On top of lack of major news, we were also watching the ‘soap opera’ out of the ECB this week where they were trying to find a solution to the debt crisis that seems to be catching everyone off guard.
With these simple factors in play, we knew this morning would be filled with slop and chop, but there would be plenty of windows of opportunity for profitable trades if we could simply wait for them.
The first thing I did for this day trading strategy was define the trading ranges on the dollar index, which tells me WHERE to be looking for the best trades. I then moved to the crude, Russell, gold, and Euro markets to see where support and resistance levels were…and I tried to ANTICIPATE where the dollar index may test support, meanwhile one of our markets would be testing resistance.
By 800am EST we had a solid plan of attack, and then it was a waiting game to see if this day trading strategy would play out as we expected…and it did.
