Market Commentary from Schooloftrade.com, Learn How to trade futures.

Market Content August 3, 2009

Today brought the first trading day of August, and unfortunately the summer is still bringing lower volume, but that did not stop us from taking quality trades. Although we did not make a significant amount of money today, we remained profitable, and that is one of the biggest keys to becoming a consistently profitable trader.

Our first trade of the morning didn’t occur until 9:15am EST on the Crude Oil market (Symbol CL). Initially we saw a long James Wave set-up, but once it failed to make new highs we looked to short the Crude Oil just before the US Equities market opening. Our 2-step short occurred at 9:15am EST and we were entering the market with great speed of the tape on our side at a basis of 71.34. We initially hit our first target at +3 ticks and were then scratched out of our remaining contracts for a profit of 3 ticks ($10/tick).

While following our strict trading rules, we waited 5 minutes after the US Equities market open at 9:30am EST to take our next trade. After the US open, we looked at a possible James Wave set-up on the Euro Futures (6E), but it was quickly disqualified due to not making higher highs. So, at 9:40am EST, with high volume finally coming into the market, we took our trend reversal trade in the form of a 2-step to the short side setting up on the Euro Futures (Symbol 6E). We focused intensely on reading the tape to see when we would enter the market, and got in short at 1.4338. The market quickly moved south in our favor and we were able to lock in profits at +3 ticks, +6 ticks and our final contract, which we let run, got us +8 ticks, for a total of 17 ticks ($12.50/tick).

The third trade of the day came about an hour later after the passing of important US news at 10:00am EST on the Crude Oil once again (Symbol CL). At 10:47am EST we noticed the Crude Oil could not hold its lows and we watched to see if we could take our trend reversal trade, the 2-step. We entered Crude Oil long at 71.42 and quickly saw great size and speed come across the tape, netting us profits of +3 ticks and +6 ticks before getting scratched out of our third contract for a total profit of 9ticks ($10/tick).

Our fourth and final trade of the day came at 10:59am EST and was a small mental mistake on our end. We noticed on the Euro Futures (Symbol 6E) that it had failed to make and hold its new highs, telling us a 2-step short was likely to occur. While we patiently watched the Euro futures, we quickly saw some great follow through past our trigger line and entered the market short at 1.4411, as we watched the tape, we quickly noticed that we were not seeing the push in sellers that we needed and the market quickly reversed on us; stopping us out at -8 ticks, for a total of 24 ticks when trading 3 contracts ($12.50/tick).

Today’s Trade Total’s: 3 for 4 $32.50 in profits when trading 3 contracts.