Today is a Taylor Trading Technique Buy day for the EMini S&P futures. Treating today as a normal trading day gave a decent buy this morning. If you treat the Sunday night trade as a discrete trading session gave earlier and lower long entry.
Last week, breakout setup days on Wednesday and Thursday yielded a big downside move on Friday. This sell off, the Sell Short day of the Taylor Trading cycle meant we would anticipate a Taylor Trading Buy day for Monday.
For a Taylor Trading Buy day we use the previous session low as the normal reference price for our entry- a failed move below the previous session low is our trigger for a long entry. For Swing Trader’s Insight I suggest we adjust this a bit- we look at the overnight trade as a separate trading session, meaning we can use overnight highs and lows as additional reference prices for trading the day session, which is the period I trade stock indices.
Sunday night saw downside follow through from the Friday selloff, as the March ES made a session low of 2733.00. This low was made shortly after the Sunday night open; it then made a higher low at 2735.00 just after 6 AM. We could use these lower lows as early entry reference prices for a Taylor Trading Buy day, as I noted in the STI morning note.
The 8:30 AM was 2739.25, and it promptly dropped below the 2735.00 low. The subsequent rally back above this low was our trigger to go long. The initial stop loss could be tight, below the session low of 2733.00. Our trade was based on having momentum in the direction of our trade; if the market fell back to make a new low it would show the momentum was long longer up.
The market showed a strong rally off the open as it pushed above the Friday low / TTT reference price at 2755.25 on up to a session high of 2763.00. By this time you should have tightened up your stop enough to end up getting out with a large percentage of the morning rally, and I would be on to looking for other markets to trade today.
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
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
