October 2, 2012
- in Uncategorized by schooloftrade
Range-bound market makes for easy price-reversal trading Crude Oil and Euro Currency Futures
This morning we had some big concerns before we got started at 8:00am EST with our morning prep. First concern was the lack of major news this morning, and the second concern was the looming Non-Farm Payroll report due out on Friday which we knew would be a reason for the BIG money to sit on the sidelines today. We quickly defined range-bound markets on most of our favorite futures markets today.
We got started trading the euro currency futures this morning, which we quickly identified as a bullish market personality but just when we looked to get long above the PHOD (as always) we noticed a very important clue from the Dollar-Index. We know the Dollar-Index was sitting at the LOD, which is considered support. The negative Dollar-Index correlation between the euro and the Dollar-Index made buying the euro a very difficult pill to swallow, so rather than buying, we looked for the Dollar-Index to bounce off the support at the low of day, and then proceeded to sell short the euro currency futures as soon as it dropped back below the PHOD. This trade got us started with some easy profit this morning.
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| My Control Center Snapshot Live Trade Account |
My second trade this morning was a full stop-loss. Yes, those DO happen in our trade room, and this morning was an excellent example of a price-wedge and range-bound market that simply didn’t want to bounce on the first try to get long. We found a price-wedge on Crude Oil as well as a double-top support level below, which we planned to use for the price-reversal at the lows. When price dropped to the lows of the price-wedge we bought the lows and took a full stop-loss of 10 ticks, but 1 tick of slippage helped us avoid the full 40-tick loss.
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