Some of the time markets are a two sided affair, and we can trade them from both sides. Other times markets are trending strongly. When they are trending we want to either trade in the direction of the trend or do nothing. That’s one of the reasons I cover so many markets for Swing Trader’s Insight, this allows me to more easily find trades that don’t fight a trend.
Today the stock indices were an example of not fighting the trend. By the Taylor Trading Technique today would be a Sell Short day however given the strong uptrend I didn’t see a tradable setup for them today. (That’s not to say I wouldn’t have taken a short sale if the market showed downside momentum; I didn’t short them because they were trending higher today.)
This meant we needed to look for other trade opportunities today. In looking at the markets for this morning’s STI watch list, one of the markets I thought to watch is crude oil. Crude is in a longer term uptrend and today was a Taylor Trading Buy day. Additionally, ROC (bottom panel of chart) was on a buy signal as well.
When I got into the office this morning it was trading around the Thursday low, our standard reference price for a Buy day. Given yesterday’s selloff, a failed downside push today would be the pattern we would look for to go long this morning.
The push to the session low stopped around 6:45 and by 8 AM it was back above the Thursday high, giving our first long entry signal. Around 10:15 AM it moved back below our reference price however it made a higher low, and the subsequent rally gave us a second chance long entry. Crude oil trended higher from here, making a series of higher lows and higher highs that rewarded traders who were patient with taking profits.
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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.
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.
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