Gold futures were labeled a Taylor Trading Technique Buy day in last night’s edition of Swing Trader’s Insight. A test of the recent low gave you either the opportunity to go long at a better price or at least confidence in the standard TTT long entry.
Tuesday (31 Dec.) was the Sell Short day in the TTT cycle, and that’s what Tuesday’s bar showed- the session close was lower than the open and the closed was at the bottom of the daily range. In addition, the ROC indicator (bottom panel of the chart) had dropped low enough to give a buy signal. The TTT Buy day told us to look for early session weakness today; we would look to go long when the market put in a bottom and started trending higher.
Gold was trading lower when I got in to the office this morning, having taken out the Tuesday low of 1179.50. This was our first signal to look for a reversal, but we don’t want to go long until we actually see the market trending higher.
Patience was a good idea this morning as it continued to move lower and by 7:20 AM CT it was testing the recent low of 1170.70 from 22 Dec. This low was a good reference price, a level to gauge whether it would continue low and rally or put in a low and begin to rally.
It traded back and forth over that reference price between 7:20 and 8:35 AM. Over this period it was unable to drop below today’s low of 1167.30, indicating lessening of the selling pressure and the beginning of a rally. This was the price and time area for an aggressive buys, with a stop under the session low.
As the low held a rally ensued, gaining momentum over the morning. The standard Taylor Trading entry was hit at 9:35 AM as it traded back above the Tuesday low. Resistance held at 1194.60 (the 50 day SMA), giving us a signal to take profits.
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.
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.
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