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.
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