This morning I had an email exchange with a Swing Trader’s Insight subscriber. He asked me if I thought there were markets that were especially good for the Swing Trader’s Insight / Taylor Trading Technique methods.
I like markets that have a distinct morning opening as they often have early session fake out / countertrend moves that the Taylor Trading Technique can be good a exploiting. Stock indices are one such market and there was a good trade setup this morning.
In last night’s Swing Trader’s Insight, the comment for the EMini S&P futures was “Cover breakout sales, Buy day”. This meant we were looking for a Taylor Trading Buy day- an early session move below the previous low. We would anticipate this early selloff to be rejected and we would go long when the market starts to rally.
Stocks were slightly higher for the pre stock market open, rebounding from an overnight selloff. After opening at 2127.25 (the 8:30 AM stock market open), the EMinis immediately dove, making a morning low of 2121.75 about four minutes later.
This break was the fake out (and setup) move for the Buy day. The subsequent rally back above 2122.50 was the Taylor Trading signal to go long, which we got around 8:35. The initial stop loss could go anywhere between 2121.75 (day session low) and 2116.00 (overnight low).
A quick rally ensued, reaching 2131.00 about ten minutes later, and a session high of 2134.75 about an hour later. If you wanted to be done for the day and week you could take profits as that was a big move in a short amount of time. If you wanted to stay long, I’d watch the Fibonacci retracement level at 2132.88- if the market could hold above there then the market could push higher.
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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