January 19, 2011
- in Uncategorized by schooloftrade
Dollar Index drops, buy the Gold and then Sell the Highs on Crude Oil Futures trading strategy
815am est
– We’re starting our day with the dollar index
– Dollar broke new lows on the daily chart, so we’re looking for some decent price action if the dollar continues to move.
– The daily chart wont give me much more than the overall direction or major support and resistance, I need something more detailed.
– The faster 34 range chart tells us a story the daily chart could not, that is we just broke new lows, but the price action says we are having a hard continuing with those new lows
– Look for the dollar to consolidate inside this area below the channel and above the wedge lows
– Price will either go back UP into the channel (selling opportunities on everything else)
– If price drops through support 78.575 looking for buying opportunities on everything else.
– Im now interested to see the speed and trading range of the dollar to give me a clue to the rest of the markets
– Average true range is rising this morning @ 815am, however, when we look at the ATR from yesterday we can see we had the worst price action in the last week.
– We’re still optimistic over rising ATR, however, we know that if ATR falls this could get dangerous.
845am est
– We’re watching the crude oil at the highs of the trading range looking for selling opportunities.
– We see the previous HOD at 92.81, so we’re going to look for the break of the PHOD for our best selling opportunity.
855am est
– Gold futures have tested the highs of the wedge, now we look to sell the highs
– As price comes off the highs we can also look to buy at levels of support
– So we’re looking for 2-step reversal off the highs, to sell the break of support at levels of resitance.
1030am est
– We have gold trading in the middle of the price range, so we have to be patient.
– We took a 21r wave short on gold to sell the highs and now we need to wait to go back to the highs to sell again, or wait to buy at the lows of support.
– Reading the tape and we see a lack of liquidity on the gold futures market.
– We saw big money buyers at 1371.7 and then immediately we saw big sellers at 1371.2
– That’s a 5 tick difference from 1 trade to the next
– The clues this market gives me tells me to be careful right now.
1115am est
– We’re having another great day, and even with 2 stops we have over 240 ticks of profit in our account.
– Now we want to make sure we only take the best trades
– After 11am the lunchtime session sets in
– We watch for the 1130am European close to be the next time we see more volume entering the market
– We’re watching for a 21range wave pattern SHORT, but we have to make sure we don’t have any support levels in our way
– 21r and 13r momentum is curled and pointing down
– I need to wait to break below the 21r trigger line, which is will act as support.
– Final target at the lows of the day 91.46
1120am est
– We see the crude oil market pushing new highs, but we need to make sure we clear all of the overhead resistance and then use that as new support for a long trade.
– I need to get above the BMT on the 13range chart on Crude looking for entry long above
– The markets are showing a definite change in personality after 11am est
– Lets see how the 1130am Euro close affects these markets
– Crude oil is in the middle of the sideways range (beware trading the middle)
