How To Hit Your Profit Targets

Market Commentary October 20, 2009

We had a good amount of news events today, which of course not only brought more volume to the market, but also made for some interesting trade set-ups. We were able to take three trades today, and all of them came on the Crude Oil market (Symbol CL). The Crude Oil market has been on quite a rally in the past few weeks, and yesterday it actually ended up trading to new highs for the year, above the $80/barrel price level. Today the buyers were not as present as they were yesterday, and early on in the London session, the sellers seemed to take control of price fairly quickly, driving prices into the $79.00 price levels ( Crude Oil Futures Day Trading Video). It wasn’t really until the opening of the U.S equities market when the Crude Oil finally broke out of its channel of 79.50- 80.00. Once the markets opened in the U.S price began to sell off quickly, and it wasn’t long before we were trading in the 78.00 price range again. We were able to go 3 for 3 today in the Crude Oil market, ending our day with a total profit of +$520.00 on 4 contracts.

The first trade of the morning didn’t come until the opening of the U.S equities markets at 9:30am EST, at this time; volume began entering the market little by little. Because price in the Crude Oil market had been consolidating in a 50 cent range, we knew that with added volume, we were able to see a trend change (Sideways Market Day Trading Futures). At 10:14am EST we were able to take advantage of that trend change with a 2-step pattern. We entered the Crude Oil market short, with a basis of 79.30. Once our order had been executed, more and more sell orders came across the tape, and we knew our trade had been placed in the correct direction; we quickly locked in profits of +4 ticks (2 contracts) +8 ticks and +7 ticks on our final contract, giving us a total of +23 ticks on the first trade of the morning ($230).

The Crude Oil market continued to short into the $78/barrel price range, and based off our technical indicators, such as the pace of the tape (P.O.T), we could tell that the selling pressure was slowly fading. We began watching price closing, looking for either a breaker pattern or 2-step to take the crude oil market long (Scalping Futures Day Trading Video). At 10:19am EST we got our chance, after a slight pullback in price, our order was executed long on a 2-step pattern. Our entry price was at 78.86; and we were able to scalp some quick profits of +4 ticks (2 contracts) before getting closed out by our ATM strategy, +8 tick’s total ($80).

Our final trade of the morning also came shortly after our second and yet again on the Crude Oil (Symbol CL). After price had looked to make newer highs, it quickly pulled back on us; giving us little time to react to price action and take a possible trade. So, we waited patiently, and not long after, it looked as if the buying pressure was slowing building up in the ticker tape, we decided quickly to enter the market long off a 2-step price pattern (Price Patterns Technical Analysis Futures Video). Our order was executed at 10:31am EST, with a basis of 78.90, it wasn’t long before we were in the profit, as price rallied strongly into the $79 price level, we were able to lock in profits on all four of our contracts, getting +4 ticks (2 contracts) +8 ticks (1 contract) and our final contract netting us an additional +5 ticks for a total of +21 ticks on the final trade of the morning ($210).