September 14, 2011

in Uncategorized by schooloftrade

Price Wedge day trading Euro Futures Quadruple Witching

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Today is Wacky Wednesday, which is classified by high levels of unexpected volume that can be deceiving to day traders.

We are looking for ‘big money’ in the markets, and this BIG MONEY may be coming in unexpectedly today, and may get un into trades that we normally would not have taken.

At the same time, holding onto a position is a little harder because we see BIG MONEY in all directions.

Identify the market personality FIRST, and then use your rules to qualify.

Example: today market personality will be the FIRST rule we use for entries.

Remember that price might move TOO FAST, or TOO SLOW.

830am est

Euro futures are trading at the highs of Tuesday’s trading range, and we see some distinct clues.

· 2 trading ranges

· Sideways, narrow range we are in

· Inside day, but possibly turning outside

· Transitional area overhead at 3811

· Bull Price Channel forming off the lows

We then use a faster 34range chart to find the intra-day price levels on the euro.

We get 4 clues from the euro:

Sideways range, which tells me to buy the lows, sell the highs, avoid the middle. Buy pullbacks with the break through the highs, and sell retracements with the break through the lows.

Bull Channel tells me that buying at support, and buying pullbacks above 1.3738 will be the higher percentage trades today.

Inside day tells me to sell the PHOD, buy the PLOD, and avoid the middle of yesterday’s range. Also tells me to buy pullbacks with highs above PHOD and sell retracements below the PLOD.

Price Wedge tells me to sell the wedge highs, buy the wedge lows, and avoid the middle of the wedge. Today we have a Bull-wedge, which means that buying at the lows of the wedge and buying at support will be the higher % trade this morning.

We have the transitional area to look at 3811. If we go above this level we buy pullbacks. If we fail to break this level to new highs we then treat it as a FAILURE and we sell, target going back into the range below 3738.

What if price rises?

Im selling the PHOD as resistance first, then if we break above the PHOD 1.3738 then I will buy a pullback. If we see the new highs fail, I will look to sell the failure as soon as price gets back below the PHOD.

What if price falls?

Im buying at support because of the bull channel. Buying the lows of the wedge at 1.3634, .3600, and 3556.

What if price goes sideways?

If we are at the highs of the range, i want to be ready for a breakout, and then look to buy the pullback.

If we trade sideways in the middle of the range Im sitting on hands.

If we trade sideways at the lows of the range im looking for the breakout to sell a retracement.

Russell Futures 89 range chart shows us distinct price structures today:

· Price Wedge

· Sideways Range

· Bull Price Channel

· Outside Day, might turn inside

New move to a faster timeframe to find the intra-day levels on the Russell

We then move to the 34range on the Russell to plan our attack:

Sideways range tells me to buy the lows, sell the highs, avoid the middle.

Outside day says to buy pullback with new highs, and if we FAIL and tumble back below the PHOD 689.6 we then consider this to be very bearish and we want to sell.

Bull price channel tells us that the long trades will be higher percentage, and when price falls we can buy at support, and buy pullbacks with new higher highs.

Price Wedge tells me to expect a fake-out breakout at the highs and the lows of the wedge, so sell the highs, buy the lows, avoid the middle, and look for the failures of the breakouts.

If price rises?

I’m buying pullbacks above the PHOD 689.6 but I am concerned about the fake-out breakout (price wedge) so make sure the breakout has ‘personality’ and momentum looks perfect.

I will expect fake-out breakouts today with the price wedge, so look to sell as price rises, until the buyers prove they are in control.

If price falls?

I’m selling short with retracements below the 689.6 PHOD as it turns to an INSIDE DAY.

I will avoid the middle of the wedge around 681.0 and the BMT 679.5

I will buy the channel lows starting at 675.0 down to 671.9, and 669.8

Price Wedge day trading Euro Futures Quadruple Witching

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