October 17, 2011
- in Uncategorized by schooloftrade
Easy Mini-Russell Day Trading with this Price channel strategy
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745am EST
We have the AB=CD Pattern telling us that we can sell short with scalps all the way down to the PHOD and PLOD levels on my crude oil futures charts. I also know that the bullish price channel is giving me longer term buying opportunities at these lows.
So short term selling opportunities going down to the lows, and long term buying opportunities at the price channel lows.
My plan on crude oil futures is to sell new lower-lows with retracement looking for price to fall to the lows of the bull price channel on the 89range chart. I want to sell retracement with new lower-lows only when our entry rules qualify the trade.
Once we get to the lows of the price channel we will then look to buy the bull price channel lows with a 2step reversal pattern and hold that short position up to the highs of the price channel to complete the trade.
815am EST
We also remember to check the volume this morning on the CRUDE 11-11 contract, and volume is being shared between the 11-11 and 12-11 contract looking for rollover to the next front-month.
We may have lower than usual volume today because of this ‘sharing’ of the volume from one contract to the next.
Crude is the ONLY market we trade that rolls over every 30 days, so this is something that crude oil futures traders are always watching.
More info on contract rollover here.
845am EST
It’s been a sleepy Monday morning, which is just fine with us because we use our time wisely preparing for the best opportunities this morning, today, and this week!
Right now we have crude oil futures trading sideways and sluggishly around the 12am EST open. We need more speed and we know that may be an issue today with the volume sharing from 11-11 and the 12-11 contracts, so be patient.
Euro currency futures is setting up for a drop off the highs of the bear price channel and we’re waiting for the dollar index to start moving more so we can trade it!
Euro currency futures setting up for a nice trade opportunity today. Different traders will use this a little differently.
We are ALL waiting for the dollar index to make its next move, which will tell us which direction to trade in today.
Day traders will buy the price channel lows as support for a short term long position.
Day Trader / Swing Traders / Position Traders (any type of trader) would wait for the dollar index to make new higher-highs above the PHOD at the same time looking to sell the euro currency futures below its PLOD as that support breaks.
925am EST
We are waiting for the US Market Open to hopefully give us some more volume to work with. We have NO market personality up to this point.
Crude oil futures we are trying to sell the highs of the bull price channel below the 86.15 major support level. Our target for trading short is down at the lows of the bull price channel around 85.00
Entry short on crude oil will use a stop loss above the 86.15 and a profit target at the next major level of support which is the buy zone down around 85.00.
Day traders can take small scalps on the way down, or swing traders/position traders can take 1 big trade down.
1020am EST
The dollar index has yet to grow a market personality and that is causing the other markets to lose personality as well. We are not getting new higher-highs or lower-lows, we are not seeing big money on the tape as we need it, and we just can TELL these markets are looking for more info to get them moving in 1 direction or the other today.
1200pm EST
We have the Mini-Russell Futures setting up for a swing trade long and we will look for entry above the 700.00 big round number.
If the sellers are too strong and they push price below the price channel lows we need to be ready for a ‘price channel break’ and we will then go short down to the ‘buy zone’ from the Price channel Break structure above 680.00.
Questions from our trade room today:
How do we transition from a day trader to a swing trader?
– You need to have a large enough trade account to handle OVERNITE margin from your broker.
o Example: CRUDE $1500, overnight = $5,000
– You need to have a good understand of how the SLOWER timeframes work.
o This takes time and consistency in watching those timeframes.
o Day traders/scalpers = 13range, 21range
o Swing Trader =34, 55, and 89Range charts
