November 15, 2011
- in Uncategorized by schooloftrade
Price Wedge Day Trading Strategy uses Dollar index correlation
Today was a challenging day to say the least, however, we made our job a lot easier by using a very simple day trading strategy that used a price wedge and the dollar index correlation to locate the best times and locations to trade.
The day began very slow and sloppy, with crude oil sharing volume between the 12-11 and the 01-12 contracts. This low volume went hand-in-hand with our day trading strategy that uses a price wedge so it was a ‘gift and curse’. The gift was that this day trading strategy would make it easy to buy the lows and sell the highs. The curse was that we had to wait for the price to move enough to get us into a high percentage location. We had to use patience, but it certainly paid off.
The key to using the dollar index with a day trading strategy is locating the short term trend, and today the dollar index had no short term trend, it was trading in a price wedge itself. This made it easy to plan for major turning points on the dollar index which we then used for the best locations to look for trades.
With the dollar index in a price wedge, and the volume very low, our day trading strategy required us to wait patiently for the highs or the lows to be tested, and only then were we ok to trade. We didn’t have to wait very long, taking our first winning trade just before 10am EST today.
