The past two sessions in the stock index futures has been a good example of how the Taylor Trading Technique cycle works.
Yesterday the stock index futures sold off out of a breakout setup (I wrote a post about it HERE). Monday’s selloff meant we anticipated a Taylor Trading Technique Buy day today.
In the Swing Trader’s Insight morning watch list, my comment for the eMini S&P futures was “. 2062.00 is the standard Buy day reference price; we can also watch the overnight low at 2065.50.”
For a standard Taylor Trading Buy day setup we look for a failed move below the previous day low to be our trigger for a long entry. If you’ve been following STI for a while you know that I like to use overnight session highs and lows as additional reference prices for Taylor Trading setups for stock index futures, as the overnight trade can be thought of as a distinct trading session.
For this reason I suggested watching the overnight low of 2065.50 as a reference price for the TTT Buy day in case the market didn’t push down far enough to reach the Monday low.
Early in the day session I wasn’t sure we would get a trade today- the eMinis opened at 2067.75 and rallied to a day session high of 2075.00. The initial rally stopped here and a selloff ensued.
This selloff gave us our buying opportunity. The market sold off, making a day session low of 2064.50. This break was our heads up to look to go long and the subsequent move back above 2065.50 was our trigger to go long.
Stocks rallied from this 9:30 AM low; the series of higher lows and higher highs was evidence of the uptrend. The day session high of 2075.00 was reached around 1 PM; this stopped the first move up while the 1:40 PM move through that level yielded a rally to the overnight high of 2078.75.
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
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.
