April 25, 2011
- in Uncategorized by schooloftrade
Look for this trade after we make new highs on crude & gold
We learn this morning that the Orthodox Easter Holiday is today, closing the banks in many parts of Europe.
This won’t have too much affect on us, with the exception of lower volume at certain times of the morning, mainly focused on the ‘Golden Lunch’
We will keep this in mind later this morning.
It’s important we focus on getting familiar with the market’s personality and the MOST IMPORTANT aspects of our day/week/month.
Open your 89-range chart on the gold and we see the following:
– Major Bullish Price channel, we are the highs
– We speculate that below us the swing and swing low creates a sideways range, that we have traded above.
With this new information, we can plan our attack using the most important aspects of the day ahead:
– We are at the highs of the channel, I want to sell the highs of the channel
– We have a sideways range below us, and we expect if price can drop into that range, price will go down to the lows of the range.
Now that we know what the most important aspects of our day will be, we now use a 34range chart to zoom in and find the exact price levels we need to trade with.
Open your 89range chart on the crude oil futures and we see the following:
– Bullish channel, we are not at the highs or the lows of
– Wedge pattern and we are at the highs
– Sideways range we are just off the highs
With that said, our plan of attack for the most important aspects of our day:
– Sell the highs of the wedge
– Sell the highs of the sideways range
– Sell the highs of the price channel
– Sideways range = buy the lows and sell the highs = we can trade either direction.
900am est
– We open the 34range chart of the DX 06-11 contract and we see the following:
– Strong bearish price channel
– Trading sideways after making new lows last week
– Swing traders = stay long = dropping dollar
– Day Traders = we can’t use this info, its not recent enough, it’s what HAPPENED, not what’s happening NOW.
– Day traders need to use a faster timeframe, so open your 13range
– The 13r on the DX 06-11 shows a very narrow price wedge
o Price wedges on the dollar = narrower price action on the markets we trade most
o We need to beware, this is telling us the market is going to be weak right now.
o Average true range is in the lower third of its ranges over the past 7 days of trading
930am est
– We need to plan our attack on crude oil this morning, and the 34range chart gives us the following
o The dollar is trading sideways, so there is no strong bias from the dollar this morning
o Sideways range from 113.07 down to 111.76
o Price wedge, we are at the highs
o Bullish price channel in orange trend lines
o PHOD was below us earlier @ 800am, but we have since traded below the PHOD, which is always expected
o The PLOD will now act like a price magnet
o We see the previous sideways range below us from 112.40 down to 111.00
955am est
– We’re waiting for the 10am news to be released
– We took our first trade on crude oil buying support as price dropped, but the market showed significant signs of weakness
– We took a +5/scratch on the advanced and
Our plan of attack on crude oil:
– We have prices falling and tape reading tells us that the sellers are in control
– If price falls
o Im buying at support first, then looking to sell using retracements
o I do not sell the lows, I wait for the news lows and then sell with a retracement
o Im buying support levels at 111.57, 111.21, 111.0 (BRN), 110.82, .68, .35 is the big money trigger line
o As prices break these support levels, I will then look to sell the break using a retracement
– If prices rise:
o Im selling résistance first as prices rise
o Im selling resistance at 112.0, 112.34 triggerline 34r, 113.07
o If prices break the resistance I will then buy using a pullback
o I do not buy at the highs
o
1040am est
– We’ve had a great day of trades with the very little price action we saw today
– Now the markets start to change personality
– The market had a nice big drop, the auto trader made $1000usd, and our fast tracks took 2 winners, and our advanced took 3 winners
– Now the crude oil sits just below the PLOD, and looks exhausted after such a busy last 45 mins
1045am est
– We aren’t seeing the CL 06-11 get any better, so let’s sit on hands and wait for the next high % trade to come our way
– Our plan of attack on crude oil is as follows:
o We’re trading sideways right now,
o Buy the lows and sell the highs of this sideways range
o If prices fall
§ Buying first, then selling new lows with a retracement
§ Buying support levels at 111.08, 11.0, 10.82, .68,
§ Beware the BMT = 110.46 so we do NOT want to be trading around 110.50 area (BEWARE)
o If prices rise:
§ Im selling first, then buying pullbacks with new higher highs
§ Im selling resistance levels of 111.62, 111.94, 112.00, 113.07 at the way up.
§ Avoid trading around the OPEN of today or the prev OPEN
§ These are 112.34 and 112.65 these will be SLOPPY
1145am est
– We began our day with concerns that we may not get any big moves this morning
– Monday after a Major Holiday, and we have European markets that are on vacation today as well
– We noticed right away that after 1045am est today the markets PERSONALITY
– We had 1.5 hours of good price action and then after the final news @ 1030am the crude made a big drop, and now sits quietly at the PLOD
– This TIME OF DAY (after the European markets close) is a good time to lose money
– We’re after the morning session, before the lunch session, and we didn’t get any added volume as we expected at 1130am
