Friday, October 23, 2009

2 Step Set-Up

Market Commentary October 23, 2009

Well it has been another great week of profits for all of the traders at the School of Trade! We saw some decent price action today; earlier in the morning many of the markets seemed to consolidate from yesterday’s close. This didn’t last long though, with the chairman of the Federal Reserve, Big Ben Bernanke, speaking at 8:30am EST as well as the Existing Home Sales figures being released today for the United States (Identify Market Sentiment For Day Trading Futures). With another exciting day in the markets come and gone, we were able to scalp off two trades, for a total of +$260 to end our week!

Our first trade of the morning came on the Gold market (Symbol GC). Today the gold market continued its consolidation throughout the early electronic trading hours, but once the currency and commodities trading began at 8:20am EST, the Gold market really started to rally. We believe this rally also had to do with the Federal Reserve Chairman Bernanke’s speech at 8:30am EST. With the passing of some of the news events and added volatility, we began looking for possible School of Trade set-ups on the Gold market (Gold Futures Day Trading Video). Our opportunity came about an hour later, when Gold was finally starting to retrace off its highs. At 10:08am EST we entered the market short, off a Breaker pattern; getting our order executed at 1062.8. The stochastics began to rollover to the short side, and as more sellers joined the market via our pace of the tape indicator, we were able to pick up +4 ticks (2 contracts), +8 ticks and another +10 ticks for our final contract, for a total of +26 ticks! ($260)

The second and final trade for us on this Friday morning came on the Mini-Russell (Symbol TF). We also saw a lot of consolidation today on the Mini-Russell; and didn’t see any real significant price action until the U.S Existing Home Sales numbers were released at 10:00am EST (E-MINI Futures Day Trading Video). With added volume finally entering into the market after 10:00am EST, we were able to start looking for possible quality School of Trade set-ups. At 10:46am EST we were able to qualify a Breaker pattern short; gaining an entry into the market at a basis of 603.8. Soon after our order had been executed, we continued to watch price action on the tape and our P.O.T indicator to see where the market was going to show us any follow through. After seeing our first target just barely missed multiple times, we decided it was in the best interest of our account balance to exit the trade early, for a scratch (+/- 0 ticks).

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