When we opened our trade room today we quickly saw a VERY different market environment that we saw Monday and Tuesday this week.
We had good volume, the market was moving, but we were still missing something…follow-through.
“Follow-through” is a term used to describe the process of confirming the move in the market. For example, we see a pattern develop on the Gold futures Market, the volume is good, lots of interest in the market at that area, but the momentum doesn’t confirm, so we have to wait.
Later in the morning on Crude Oil futures market we see an almost perfect pattern develop, moment is there, plenty of room to let the trade run, but the large buyers/sellers never showed up to confirm the trade…that means NO follow-through, the traders in the market didn’t finish the job and we had to wait on the sidelines to wait for confirmation.
Its important on days like today that we remember we need to use 100% of our rules, and when we try to “cut corners” in our trading, the markets have a very efficient way of telling us we made a mistake, causing us to lose money, and more importantly, confidence.
Today was a day that appeared to be filled with opportunity, but if you are a rule-based trader like we are, it was a very tough day b/c we did a LOT of work watching patterns that went nowhere.
Remember, the highest % trades are the ones we want, which means that our rules need to be 100% satisfied. Anything less means you are playing with the potential of a reversal b/c its NOT a high-percentage trading opportunity.
We still made money today, even with 1 loss!
• 907 CL = +18T
• 1011 CL = -19T
• 1024 GC = +8T
• 1048 GC = +10T
• TOTAL = 17T ($170)
We began our trading day in the live trade room today with a very slow and sluggish market.
Every morning we have to IDENTIFY the market we are going to attempt to trade and today’s market made it very clear that once again, patience to wait for the very best high-percentage trades would be a must.
With very little volatility and even less “follow-thru” we had to be aggressive with our defense when making trades, and that proved to be exactly what we had to do!
Our first two trades of the day were both scratches, which mean we enter the trade and exited the trade at the same price level.
Given the situation, we were pleased to be able to exit both of these trades without a loss, which is a credit to our ability to follow our simple exit rules.
Our first trade was on Gold @ 10:26am EST, a Breaker Pattern.
We followed our rules to get into the trade, but then when we entered the trade we quickly noticed that the market had died and our indicators were telling us to GET OUT QUICKLY!
It’s vital that we understand how to have confidence in our EXITS, just as much as our entries and this was a prime example.
After we got into the trade, we saw the MACD Indicator move below the zero-line, the momentum indicator pointed down, and the Pace of Tape Indicator turned to RED, which means the price action is slowing down and we need to exit this trade.
The best way to exit a trade early is to…
Watch your indicators first, they will tell you when to be looking for an exit
MACD
Momentum
Pace of Tape
Look for a way to get out without a loss, somewhere at your entry point
If the market is above your entry point, simply move your stop up to entry to lock out the risk on the trade
If the market is below your entry and you are facing a loss, move your stop up to entry and the market will force you out of the market for a small loss
Don’t over-react, wait for the best time to get out
Do not simply flatten your position, give yourself the opportunity to make a profit if the trade ends up moving in your direction.
Our final 2 trades were both winners, and the trade that made us the most money today happened when we least expected it!
You always need to be ready and prepared for what the market can throw at us, and the final trade on Crude Oil was a great example of that.
Just when we thought the market was dead, it picked up the pace of the tape and gave us a great Breaker Pattern Set-up just before the end of the morning.
The final trade on Crude Oil made us 66-ticks, totaling $660usd and $760usd TOTAL for the day today!
The markets today showed some great volatility, providing us with some great volume to trade off of. The Asian session closed its trading down for the day, and surprisingly the European session did not follow suit, and instead closed slightly above break-even. So far in the U.S trading day, a majority of the indexes are up for the day, but as far as the major commodities go, Crude Oil is down and Gold has really just chopped around in a tight range for most of the morning (Identify Market Sentiment For Day Trading Futures). Luckily this price action didn’t seem to affect our trading too much, and there were really only a few news events we had to be aware of this morning: he Canadian and U.S Trade Balance released at 8:30am EST as well as the U.S’s Unemployment Claims, which were also being released at 8:30am EST. The added volatility in the market really gave us a chance to take some great trades this morning; we ended up taking a total of 6 trades, and went 6 for 6 with a total profit of $1,020!! This has been our third day in a row with 100+ Tick days, and so far has been the best week on record for profits!
The first trade of the morning was taken on the Crude Oil (Symbol CL). We had to wait patiently for news to be released at 8:30am EST, not only was it U.S news, but Canadian as well, which can have profound impacts to the Crude Oil market. After the news has been released, price action seemed to chop around, and really only started trending after the U.S Equities market opened at 9:30am EST ( Crude Oil Futures Day Trading Video). As price action began to trade at a steady pace, we were finally able to enter the market at 9:53am EST by taking a Breaker short pattern at 71.10. After seeing volume start to increase to the short side, it wasn’t long before we saw some follow through with price action, allowing us to scale out of our trade with +4 ticks (2 contracts) +8 ticks and +4 ticks for a total of +20 ticks ($200).
After closing our previous trade with a nice profit, the crude oil market began to oscillate yet again, pulling back just enough for us to begin looking for another trade. It was obvious that the market participants that were trading Crude Oil were not done pushing price lower, and thus continued its trend downward (Swing-High Swing-Low Technical Analysis Day Trading Futures Video). At 10:02am EST we were able to enter the market short, using a Breaker pattern to obtain a basis of 70.66. Upon getting our order executed at market, we soon saw some heavy sellers enter the market, via the ticker tape, and were able to take some quick profits on our trade, for +4 ticks (2 contracts) and +1 tick (2 contracts) for a total of +10 ticks ($100).
Our third trade of the morning came on the Gold market (Symbol GC). For a majority of the morning the gold market has really kept itself in a tight range between $1130 – 1120/oz. As the U.S equities market opened at 9:30am EST, price action was just beginning to trade up towards the high of the day around $1130/oz, and after watching the ticker tape, it was finding obvious resistance. With price coming off the highs rather strongly, we looked to enter where the volume was most, which was the short side (Gold Futures Day Trading Video). At 10:19am EST we were able to identify a great Breaker short pattern in price, and ended up getting our order filled at a basis of 1126.8. Once in the market, the other sellers took over price action, quickly pushing it far enough for us to take some great profits at all three of our targets! We took profit at +4 ticks (2 contracts) +8 ticks and +1 tick for a total of +17 ticks ($170).
After closing our previous trade at a profit, we decided to wait for the U.S to release its Natural Gas Storage figure at 10:30am EST. With news being released, it gave us time to scan the other markets we trade, and possibly find volume in another index. After the news had been released in the U.S, we noticed that the Crude Oil market was still moving strong, and decided to give it another look through (Sideways Market Day Trading Futures). At 11:28am EST we were finally able to enter the market, taking yet another Breaker pattern short. After a brief pullback in price action, our order was filled at 70.50; turning out to be a great entry price and allowing us to take a small profit on the trade. We were able to scale out of our trade at two of our three profit targets for +4 ticks (2 contracts) and +1 tick for a total of +10 ticks ($100).
As soon as our fourth trade on the Crude Oil was closed, we soon realized that the pullback in price that had closed our order earlier was losing momentum, and the sellers in the market had a high probability to push price back down (Scalping Futures Day Trading Video). Volume really told us which way the market was going to move, and we quickly looked for a way to enter the Crude Oil market again to the short side. Luckily, at 11:30am EST we were fortunate to see another Breaker pattern set-up for us, allowing us to enter short at 70.44. This time, the sellers were not giving up easily, which was great for us because it allowed our trade to execute at all three of our profit targets, for +4 ticks (2 contracts) +8 ticks and +4 ticks, giving us a total of +20 ticks ($200).
Upon closing our short trade in the Crude Oil, we soon realized price was trading near its low for the day, and finding significant support. As we watched the ticker tape closely, it became apparent that the buyers were beginning to take control of the market again. After seeing some rather large buy orders enter the market, and an increase in volume to the long side, we began to qualify different trade set-ups to take (Price Patterns Technical Analysis Futures Video). At 11:33am EST we were able to take a nice trend reversal trade by using our 2-step pattern long to enter the market at 70.40. This entry proved to be the right one, because before we knew it, our profit targets were getting executed, allowing us to trail our stop to lock in profits for our fourth and final contract, for a total of +4 ticks (2 contracts) +8 ticks and +9 ticks, giving us +25 ticks on the final trade of the morning ($250)!
The markets showed us some great volume this morning while we were trading. Starting from last night, the Asian session was actually down at its close and the same held true for the European trading session as well. So far today though, the U.S markets are just at about break-even. There was a limited amount of U.S news events to watch out for today, which made it a bit easier to get into a rhythm as far as trading is concerned. This surely paid off, as we were able to take a total of 8 trades today, going 8 for 8 with a total profit of $1,410!!
We started our trading day off in the Crude Oil market (Symbol CL). Yesterday’s price action in the Crude Oil market saw a lot of support around the 72.50/barrel price level. Today though, sellers were able to break that, though not for long, as price really traded within the $73/barrel range for most of this morning. The European trading session provided the market with a sharp selloff in the price of Crude Oil, and looked to continue the trend into the open outcry pit trading, which starts at 9:00am EST. With more volume entering the market at 9:00am EST, we waited patiently for a possible set-up to occur, as more traders would soon be entering the markets. At 9:01am EST, we were able to continue the downtrend in price, by taking a Breaker pattern short trade (Price Patterns Technical Analysis Futures Video). Obtaining a basis of 73.09, the market was soon showing significant selling pressure enter the market, and it wasn’t long before we were able to scale out of our position at all three of our profit targets for a nice profit of +4 ticks (2 contracts) +8 ticks and +17 ticks for a total of +33 ticks ($330).
Our second trade of the morning came only minutes after our first, and was taken yet again on the Crude Oil market. After we had closed out first trade, the crude oil market obviously began to pullback in price, due to sellers taking profit. The rally didn’t last long though, and as volume began to decrease to the long side, we looked to enter the market short once again (3 Key Components To A Day Trading System Video). At 9:07am EST we took yet another Breaker patter to the short side. Our order was executed without any issues at a basis of 72.72; and after seeing the momentum in the market being to curl to the short side, we knew we had a high probability of getting at least our first profit target filled. Sure enough, sellers pushed price down further, allowing us to take some profits at two of our three targets, for +4 ticks (2 contracts) and +1 tick (2 contracts) for a total of +10 ticks ($100).
After closing our second trade of the day, we decided to sit on our hands and wait for the U.S Equities market to open up at 9:30am EST before entering another trade (Identify Market Sentiment For Day Trading Futures). As the equities market opened, price began to rally in the Crude Oil market, as buyers began filtering into the market. After price had been pushed further north though, buying pressure was beginning to slow, and we were able to recognize a nice trend reversal pattern called the 2-step setting up for us. At 9:47am EST we entered the Crude Oil market short, using a 2-step pattern to obtain a basis of 72.93. As the market broke through a previous level of support, we were able to take some great profits, for +4 ticks (2 contracts) and +3 ticks (2 contracts) for a total of +14 ticks ($140).
Almost instantly after closing our short position in the Crude Oil market, we noticed that momentum began to curl up, and we noticed that a group of larger buyers came into the market, via the ticker tape (Scalping Futures With 1-Contract To Start Video). With buying pressure increasing quickly, we decided to enter the market and scalp off a few ticks to the long side. We were able to take a Breaker pattern long at 9:51am EST, and obtained a basis of 73.15. The buying pressure was able to send price up just far enough to trigger our first profit target, but soon pulled back, closing our trade with a nice small profit of +4 ticks (2 contracts) for a total of +8 ticks ($80).
Upon closing our previous trade on the Crude Oil market, we began to see a nice increase in volume in the Gold market and decided to watch that market for a little while. The Gold market has basically made one large rounding top today, trending higher in the Asian and European sessions, but starting to decline in price shortly after the U.S markets opened (Scalping Futures Day Trading Video). As the U.S equities market opened, Gold’s initial reaction was actually to the long side, and it looked as if prices were going to trend higher for the day. After seeing a slight pullback in price action, more buy orders began scrolling across the ticker tape, and we decided to buy the pullback. Using a Breaker pattern long, we entered the market at 9:54am EST, and got a basis of 1143.9. With buyers now entering the market at a steady pace, we were able to get filled at our price targets and closing our trade with a nice profit of +6 ticks (4 contracts) for a total of +24 ticks ($240).
With news in the U.S being released at 10:00am EST, we decided to take a small break from trading as the news was released. While we waited for the markets to show us another set-up, we finally noticed a possible Breaker pattern to the Long side setting up in the Gold market (Symbol GC) (Gold Futures Day Trading Video). With large buy orders coming across the ticker tape, we decided to enter the market long at 10:41am EST. Our buy order was quickly filled at a basis of 1143.9 and we were able to scalp a few ticks from the market before our order was closed for +4 ticks (2 contracts) and +1 tick (2 contracts) = +10 ticks ($100).
After seeing a lack of follow through to the long side on our previous trade, we quickly decided to enter the Gold market short. We had to react rather quickly, and used our 2-step pattern to enter the market short at 10:42am EST. Upon getting our sell stop limit filled at 1143.0, volume proved correct in showing us the direction of the trade and we were able to close our trade with a profit of +4 ticks (2 contracts) and +1 tick (2 contracts) for a total of +10 ticks ($100).
Once we had closed our trade in the Gold market, we began to scan all the markets we were watching, looking for another trade set-up we could take. We didn’t need to wait long before seeing some great volume on the Crude Oil market. After the Crude Oil Inventories news had been released at 10:30am EST, the Crude Oil market quickly shot down to $72/barrel, but then began to make a strong rally after the news had been released. This rally lasted for almost a half hour, finally hitting resistance at around $73.50/barrel ( Crude Oil Futures Day Trading Video). It wasn’t hard to see that by the time the market had made its last high around 73.50, the sellers were sure to take control of price. Soon after buyers began taking profits, the sellers began entering the market in multiples, pushing price down even faster, and giving us a great opportunity to enter the market short. We were able to get our order filled at 11:10am EST, by taking a Breaker short at 73.10. Once our order was filled, we were quickly able to take profits at all three of our price targets, scaling out of our trade at +7 ticks (2 contracts) +8 ticks and +10 ticks for a total of +32 ticks ($320).
A majority of the markets world-wide were down today. The selling began throughout the Asian trading session and has continued to carry into both the European and U.S sessions. It seems evident that the end of the year sell off might be here, as traders sell to not only take profits, but also look to close long term positions for tax purposed etc. The selloff in the past few days might only be a correction in the market, we will find out soon enough that is for sure. It didn’t seem to affect our trading though, because the markets have still been showing great volume, which allowed us to go 6 for 6 today for a total profit of $920!!
Our first trade of the morning came on the Crude Oil market (Symbol CL). The European trading session today brought price even lower after yesterday’s selloff. With Canadian news being released at both 8:00am EST as well as 9:00am EST, we made sure to wait to enter the any trades until they had passed. This is because Canada is a high exporter of many commodities, and is such that their news can affect the markets from time to time. At 9:00am EST, after the news events has been released, as well as the open outcry pits began trading, price began to channel from 72.50 – 73.20/barrel (Identify Market Sentiment For Day Trading Futures). With added volume coming into the market, we were able to identify a great market turning point by taking a 2-step short trade at 9:07am EST. Our price pattern gave us an entry price of 73.17 and with more sellers entering the market, it helped our position tremendously by allowing us to scale out at all three of our profit targets, for +5 ticks (2 contracts), +8 ticks and +14 ticks for a total of +32 ticks ($320).
After price action in the Crude Oil market began to pullback shortly after our first trade, it looked as if sellers were not done yet, and we quickly looked for a possible entry to the short side yet again (3 Key Components To A Day Trading System Video). At 9:11am EST, with momentum curling downward and sellers entering the market at an increasing pace, we entered the crude oil market once again to the short side. This time around we used a Breaker pattern instead of a 2-step and were able to get a basis of 72.95. With the market already selling off as we enter the trade, we were able to scale out of our trade after all three of our profit targets had been executed; for +4 ticks (2 contracts) +8 ticks and +2 ticks for a total of +18 ticks ($180).
The third trade of the morning came after the U.S Equities market opened, and once again in the Crude Oil market. We made sure to scan all of our markets while waiting for the U.S market to open, but none seemed to be trading like the Crude Oil market. After the equities markets began trading, we began to look for a possible trade to take (Scalping Futures Day Trading Video). At 9:44am EST we found our trade, by using a Breaker pattern to enter the market short at 72.68. Upon entering the market sellers were slow to show us any real follow through in price, but the volume was still enough for us to execute two of our three profit targets; for +4 ticks (2 contracts) and +1 tick (2 contracts) for +10 ticks ($100).
We didn’t have to wait long before the Crude Oil market began to pullback yet again. Buyers began entering the market with considerable volume, but after reading the ticker tape, we determined there was a good probability the market might reverse. After price action showed us a great looking double top pattern, we looked to quickly enter the market to the short side (Price Patterns Technical Analysis Futures Video). At 9:50am EST we entered short with a 2-step pattern; getting our order executed at 72.82. As the buyers took profits and more sellers entered the market, we were able to scalp off a trade, closing with some great profits from the market, for +4 ticks (2 contracts) and +1 tick (2 contracts) for a total profit of +10 ticks ($100).
Our last trade of the morning that was taken on the Crude Oil came after the U.S had released its IBD/TIPP Economic Optimism figure at 10:00am EST. After the news had been released, the market began to rally with conviction, trending towards the high of its channel at 73.20. When price action finally began trading near the top of its channel for the morning, we noticed that the buying pressure, via the ticker tape, was not increasing, and so we looked to fade the market to the short side ( Crude Oil Futures Day Trading Video). At 10:34am EST we were able to enter the market short with a Breaker pattern, giving us an entry of 72.96. Once our order had been executed, it wasn’t long before all three of our profit targets had been executed, closing our trade with a nice profit; with +4 ticks (2 contracts), +8 ticks and +6 ticks for a total of +22 ticks ($220).
The final trade of the day came on the Gold market (Symbol GC). Towards the end of trading in the Gold market yesterday, price began taking back some of the sell off that had occurred earlier in the morning, closing around its opening price. This uptrend did not continue into today’s price action, as the European trading session as well as the U.S sent prices further south (Gold Futures Day Trading Video). During the U.S trading hours, price began to channel downwards, continuing the overall trend of yesterday. After seeing a pullback to the long side though, we decided to fad the rally and look for a short entry. At 11:09am EST we entered the market by using a Breaker pattern; giving us an entry price of 1153.2. As soon as our first profit target was executed though, the MACD indicator began to curl up, and so we decided to take profit on our two remaining contracts manually, giving us a total profit of +4 ticks (2 contracts), +3 ticks, +3 ticks = +14 ticks ($140).
