January 13, 2011
- in Uncategorized by schooloftrade
Trade Management Strategy for Sideways Markets Dollar Index, Crude Oil and Gold Futures
Let’s begin our day with the dollar index:
– Daily chart shows us coming off the highs of the price wedge
– Daily chart shows us off the highs of the sideways trading range
– Falling dollar = rising prices on everything else
– Looking for BUYING opportunities may be the best way to trade today
– The 34 range chart shows the dollar sitting on major support, with lots of open space to the downside if it can break the support.
– Expect to see some choppy price action while the dollar breaks this support level
– If and when the support is broken, look for buying opportunities on the way down.
– If the dollar rallies off this support, we need to sell the highs on other markets we trade.
– 2 options right now
– If the dollar falls = buy support on CL/GC/Euro, etc
– If the dollar rallies = sell resistance
850am est
– The gold futures are at the highs of the price channel
– At the highs of the sideways trading range
– So we’re looking to sell these highs, or buy the pullback after seeing a breakout
– 1400 is within striking distance, so consider that level to be a price magnet
– You can see the big price gap from 1389 up to 1397.5, this will be an excellent place for a buy opportunity at the lows, or sell the highs of 1397.5 when we test the highs.
905am est
– We took three winners on the gold futures market when it broke new highs
– We didn’t risk buying the highs, we bought the pullback on the 4range chart
– We then sold the highs with a 2-step reversal pattern
– And then took our profit and reversed our position into a wave long on the 13range chart
– Now we see the price slowing down, momentum curling and pointing down, and we see the market trying to go back down into the sideways range that it just tried to break out of.
1030AM EST
– The markets are VERY slow and sluggish today
– It appears that the big money is waiting for news events later today and tomorrow (Friday)
1115am est
– We’ve really developed into a good day today
– The price action has been horrible
– I jammed my charts again @ 700am est which was frustrating (but I learned from it)
– The dollar is very slow (pace of tape is red)
– It appears people are STILL waiting for the news on Friday morning.
1130am est
– We finished our morning with 260 ticks of profit
– That didn’t come easily
– Lots of scratch trades, sloppy price action, and a failure to move with any conviction
– We waited for the euro close @ 1130am and took 2 winners on the crude oil, and now the speed slows down and we finish up our morning with questions and answers.
What did we learn today?
– The importance of waiting patiently for the momentum indicators to confirm
– Watch momentum on the wave pattern to spot a failure, the failures were very successful today.
– Trend line function that puts TL’s on multiple timeframes will jam your charts.
– Doesn’t work with RANGE charts, only time charts
