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.
Risk Disclosure
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
