Learn To Trade Stock Patterns

Market Content 7-17-09

Well I’m sure we all wish every Friday in these summer months could be like todays! We started our day off with a little riskier trade than usual on the Dax Futures (Symbol FDAX) at 3:10am EST seeing a great 2-step formation to the short side at a price of 4996. The trade involved higher risk because our EMA indicator, which is our trigger line, was moving a little slower than usual. Once again though we relied on our rules and read the tape to determine the best time to enter our trade. Patience was a key factor in this trades success, and it shows because we took the trade for profits of +2, +4, and +10 for a total of 16 points on 3 contracts.

Shortly after our first trade of the day, the Dax Futures (Symbol FDAX) provided us with yet another 2-Step pattern to take short at 3:42am EST. This was another risky trade, but again the rules we follow make even the riskiest trades profitable because of the discipline we instill in them. The risk came in the form of lower volume than usual, but our technical indicators as well as the tape provided us with enough information to take the trade. We entered short at 5003.0 where we took profits at our targets of +2, +4, and +4 for a total of 10 points on 3 contracts.

Our third trade came at 3:56am EST, yet again on the Dax Futures (Symbol FDAX) and involving another 2-Step set-up to the long side. We entered the market long at a price of 5016.5 with all of our indicators telling us to take the trade, we shortly found out though that sellers took control, but not before we managed to scalp +2 points from the market, closing the trade with a profit.

The James Wave set-ups occurred for a fourth time on the Dax Futures (Symbol FDAX) at 4:24am EST providing us with a Wave long at 5013.5. We entered this trade after seeing a strong push in price come across the tape, we then kept our eyes on the tape and watched as our momentum indicator began to curl upwards just enough for us to scalp the Dax for a profit of +2.5 points.

The fifth trade of the day came early on in the Crude Oil session (Symbol CL) at 9:05am EST this morning. Once again a perfect 2-step to the short side revealed itself. Watching our price levels and indicators with discipline we took the trade short at 61.96 for a quick scalp of +3 ticks and were then stopped out when the price action became increasingly choppy.
We then found ourselves again trading the Dax Futures (Symbol FDAX) shortly into the start of the US trading session. Our 2-Step trade appeared in the market at 9:45am EST when we entered the market at a price of 4988.5. Price action shortly changed on us, and we ended up taking a stop loss for -15 points.

Trying our hardest to follow our rules and not to chase trades in an effort to make up for the previous stop we took, a perfect 2-step set-up occurred yet again in the Crude Oil market. This trade worked out so well we took it twice! First we entered the market at 10:09 am EST at 63.23 short where the momentum was in our favor and we were able to scalp a profit of +3 points. We were shortly stopped out due to a pull-back in market price, but our ability to read the tape gave us a great opportunity for a re-entry less than a minute later! We entered short once again at 63.24 and took another +3 points from the Crude Oil market before getting scratched out. These two trades gave us a combined 6 points total.

The second to last trade of the day came on Crude Oil again at 10:24am EST this morning. We saw a great James Wave set-up long. When we saw momentum curling in our direction and the speed of the tape on our side we entered the market at 63.59, taking profits at +4, +8, and trailing our stop on our final target to lock in the most profits possible of +7, giving us a total of 19 ticks on the trade.

Our last trade of the day came just shortly before the US markets took their usual lunch, and on Crude Oil again! We noticed at 10:57am EST a 2-Step pattern set-up perfectly, allowing us to get a great position at 63.08. With our strict trade management rules we were able to take profit at +3, and +6 ticks before ending our last contract for a scratch, giving us a total of 9 ticks on a 3 contract trade.

We ended up going 9 FOR 10 Today with a total profit of +$ 912.50
+15.5 pts DAX ($35/pt) = $542.50
+37 T CRUDE ($10/tick) = $370