The Taylor Trading method seeks to anticipate a market’s direction for a given day and then trade when the market moves in the anticipated direction. Combining things like the longer term trend and other things like breakout setups can create a good synergy of patterns to look for.
It’s been difficult to find many good Taylor Trading setups that I use for Swing Trader’s Insight. Markets either have small range breakout setups that go nowhere (or like stock index futures, rally overnight as they did last night.) I would guess some of this can be attributed to uncertainty about the US Presidential election. However, that’s not to say there’s nothing to do, we just need to look at many markets and concentrate on those that look to have potential.
The Euro FX futures were on as Taylor Trading Sell Short day signal as well as a breakout setup (NR7 on Monday). The Sell Short day told us to look for an opportunity to short on a failed rally above the Monday high while the breakout setup suggested we look for continuation on an early stage market move.
The Taylor Trading Technique Sell Short day suggested we should look to short on a failed rally above the previous day high of 1.1037 (This is based on where the market was around the Chicago open; if it were earlier in the session and / or if the market was higher we might use a higher overnight price.
Around 7:30 AM there was a failed rally above the Monday high; this provided us with our first selling opportunity. The initial stop loss could go above the high of the bar of entry or a higher high if you wanted more room.
Given today’s breakout setup, we like to look for impulse moves in the direction of the breakout. In this case we could lo0ok to short on a break of the session low of 1.10175, anticipating this would extend the downside. That’s what we got as it fell to a session low of 1.0997.
A larger downside breakout would be predicated on a move below the Monday low of 1.0992. This didn’t happen- the 1.1097 low was tested and held about an hour later. This was a warning sign to cover shorts or at least tighten stops. If you were looking for another trade here, I would look to short if it took out the Monday low of 1.0992.
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Essential Guide for Futures Swing Trading
In this guide, experienced trader and broker Scott Hoffman explains the trading methods he uses to analyze and trade the futures markets and to publish his trade advisory, Swing Trader’s Insight.
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