Yesterday I gave a webinar where I explained the trading methods used in my Swing Trader’s Insight advisory. I had a few new subscribers mention the soybean market today so I thought I would go through how I approached the bean market today.
By the Taylor Trading Technique, November soybean futures were on the Buy day of the cycle. Today’s rhythm was a breakout rally on Tuesday, which was followed by a TTT Sell Short day on Wednesday. Beans sold off on Wednesday after failing to clear last week’s swing high of 978-4 and the close at the bottom of the daily range is what we would expect for a Sell Short day.
The TTT Sell Short day Wednesday meant we would anticipate a Buy day for Thursday. I was especially interested in this signal because the higher timeframe trends are up. However, I don’t trade overnight so we had to wait for the day session to trade them.
There were two potential long entry setups for the day session. First, we could watch to see if the market made another move back below the Wednesday low; a subsequent move back above there (a “low violation” buy) would be a standard TTT Buy day entry.
However, a market in a strong trend may not give you a pullback to buy. If it doesn’t, we need to have an alternative entry setup. For this I like to use overnight highs and lows in grains and the stock indices.
For the November beans we could watch the overnight high of 967-4. The setup is similar to a breakout day; we go long when the market rallies above the high, anticipating that would serve as a springboard to a bigger rally. This gives us a way to enter a strongly trending market while still having proof the market is moving in the direction we anticipate (at least at the time of entry).
The rally occurred right after the 8:30 AM open; pulling us into a long entry. The initial stop loss could go below the 7:30 AM low of 961-4, the last swing low of the overnight session. After a retest of the overnight high it rallied for the remainder of the session- it didn’t take out an intraday swing low until about 10 minutes before the session close.
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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