August 3, 2010
- in Uncategorized by schooloftrade
Review of Today’s Crude Oil Futures Day Trade SchoolOfTrade.com
Did you see the first trade of the day today? It was a Loss @ 900am EST
Did you see the second trade today? It was a 140-tick winner @ 903am EST
So how did I know to reverse my position and get long for this monster winner?
It was simple..but you had to watching for it.
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We start out with the crude oil futures trading at the high of the trading range from last week and when we added some basic trend lines we then saw that we were at the highs of the wedge pattern as well.
We always know to “short crude oil futures at the highs, and buy crude oil futures at the lows”
So we were looking for short entries from the beginning, and that is what led me into my first trade of the morning, which was a 2-step reversal trade on the 4-range chart.
I checked my rules for this short entry and everything looked good, in fact, I was pretty excited about this trade because we had previously seen SO MUCH PROFIT on trades just like this…but that was a little ahead of myself. J
Once I got into this short trade I noticed the following:
– We made the initial 2-3 ticks of profit, and then we stopped
– The buyers entered the market in BIG BLOCKS
– The speed slowed down on the pace of tape indicator
– Momentum curled up from the bottom on the 4-range chart and the 13-range chart
– More BIG MONEY BUYERS on the time and sales window ( reading the tape the whole time while I am scalping this futures market)
– Higher high on my trade management chart showed buyers now taking over control
So with the momentum shifting, big money buyers, and the speed slowing down, it was clear to me that this great looking trade was not on the right side of the market, and this little reversal pattern on crude oil futures was merely a pit-stop on the major move to the upside.
So the market tells me I’ve made a mistake…how nice. J
Now I know two things:
– Get OUT of my short entry FAST….REALLY Fast
– Now look for a long entry, and look for it QUICKLY because this market is MOOOOOVING!
I scanned my charts….34-range…21-range…13-range….all I can see is a simple breaker pattern on the 13-range chart…bingo!
I check my rules on the 13-range entry pattern long, knowing the market is poised for a big move up after getting such CLEAR feedback from reading tape on that last trade, and I enter long at the trigger location.
Please remember, we had to quickly identify our stop loss and profit targets on this trade, and this is done with our members each week , so be sure to inquire about members-only training for trade management strategies.
So I enter long, knowing where my first two targets would be, and leave our 3rd and final target open to suggestions once we get to that road we will cross it.
So we filled our first two profit targets pretty easily as we usually do, and now its time to manage the final portion of this trade.
The final portion of trade management is the difference between a 50 and a 100 tick winner. Its as simple as that.
I moved my stop up locking in profit and eliminating risk on this trade as I noticed SWING LOWS in the crude oil futures 13-range chart, so my trade was protected.
I also used a simple technique called the AB=CD Pattern to plan my final profit target, and as you can see, we were DEAD ON THE MONEY with our trade management!
In conclusion, we originally had the crude oil futures market dialed in for a short trade, but the market had a different plan for us…so we had to react quickly, and because we had been prepared ahead of time, we were in a perfect place to take advantage of this great day trade on crude oil this morning in our live trade room.
Thanks for the time tonight guys, see you tomorrow in our live day trading room @ 745am EST
