The Taylor Trading Technique (TTT) seeks to anticipate when short term trend changes are likely to occur and then takes positions to take advantage of traders who get trapped when the market reverses direction.
Today was a Taylor Trading Sell Short day in gold futures. After making a low last Friday, it rallied for the first three days of the week. Yesterday’s high of $1274.40 was a Fibonacci retracement resistance level as well, making today’s setup even more interesting.
On a textbook TTT Sell Short day we look for an initial move above the previous day high. A subsequent move back below the previous day high marks the trend reversal and our short sale signal.
Gold spent much of the morning slightly higher, seeing a bit of volatility around the wrap up of the ECB meeting. Around 8:30 AM it rallied to a session high of 1275.90 then turned back down, triggering our short sale.
The initial stop loss would go above today’s high. TTT trades are predicated on going with momentum; if the market went up to make a new high then the momentum would be up and we would want to be out of shorts.
For this trade we didn’t have a problem with momentum as gold sold off over the morning, making a session low of 1265.70 around 9:35 AM. A successful test of the low occurred about 15 minutes later, giving a signal to cover shorts.
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.
