Last year I wrote a report in which I said a characteristic of the markets during the Trump presidency would be more breakout trade opportunities (You can get a copy of that report HERE). I added a section to the Swing Trader’s Insight (STI) advisory to highlight these setups.
Silver futures were one of the markets labeled with a breakout setup in last night’s STI. On Wednesday, July silver had a NR7, an inside day and a doji bar- a trifecta of breakout patterns. Today we would anticipate out of this consolidation, and look to either buy a rally above near in resistance or sell a break below near in support, looking for that to serve as a springboard to a larger move in the initial direction.
For the short sale, we would look at the two previous day lows at 14.765 and 1474.5 respectively. Specifically, we placed sell stop orders to go short just below these two lows, so we would get short as the market broke support. Had the market rallied, we would have had resting buy stop orders above the high to go long.
Our short entry got triggered just after 7:30 AM. Our initial stop loss would go above the session high of 1482.5, giving the trade an initial risk of about $400 and $500 respectively. After an 8:10 AM test of resistance, the market trended strongly lower over the morning, the 2019 low of 1457 was broken midmorning. As the market never regained 1457, staying short with stops above that level would be a good idea, as so far there has been no confirmation the low is in.
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Breakout Futures Trading Guide - Written by veteran futures trading professional Scott Hoffman, Breakout Futures Trading Guide explains the exact chart patterns you can use to identify futures markets that may be set up for trading sessions with large directional moves the day before they happen!
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