According to the Taylor Trading Technique, a Sell day is a transition day. It is a session in which Taylor’s “smart money” traders sell out long positions they bought on the previous (Buy) day. The TTT Sell day is the session preceding a Sell Short day, in which the “smart money” shorts the market as it tops out and then sells off.
Because of the transition nature of a TTT Sell day, I often don’t look to trade markets when they’re on the Sell day of the cycle. They don’t have the clear cut anticipated direction of movement of the other two days, which can make it more difficult to find trade opportunities.
However, if a market’s daily trend is down I may look for a short sale setup on a Sell day, looking for a selloff to come a day earlier than the Sell Short day. This was why I looked to short gold futures today.
In this morning’s Swing Trader’s Insight watch list I wrote that for December gold futures, a break below the post-employment report low of 1262.80 could see downside follow through. If it broke below that level, anyone who bought gold after NFP would now be in a losing trade, and the lower it went the more likely they would be to sell out of long positions.
The intraday chart below shows that we got the short entry just after 8:50 AM CT. By 9:15 it reached Friday’s low of 1258. Friday’s low held the market up for a bit but by 9:55 it started down again, making a session low of 1253.50. The intraday double top at 1255.50 would be a good place to use for a lower stop loss level.
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.
Risk Disclosure
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