Breakout Day Trading Scalping Gold Crude Oil eMini Russell Futures

800am EST

Today will be an early close to the trade room so JJ can move  10:30-11:00am we will be closing up.

Joe will be on Vacation from 2nd, re-open the trade room on the 13th. Re-open Monday after Labor Day Holiday.

If you have a trial cut short because of this simply email our sales@schooloftrade.com and they will extend your time.

We have some concerns over the news at 2:00pm EST regarding the FOMC Meeting Minutes.

2 weeks ago the FOMC Meeting had notes, and now they will be releasing those notes, so we’re concerned day traders may be waiting to see what this news looks like before they trade today.

The biggest concern this time of the year is VOLUME and SPEED.

So lets look at our markets and see how they are doing today…

We can see some weak markets today, here are the signs…

- Choppy price action around trend lines
- Going from one extreme to the next with very little volume
- Sideways at the highs or the lows
- It moves from one trend line to the next on very low volume

Crude Oil futures are trading sideways at the lows of the very same trading range we marked up yesterday from 75.25 down to 73.41.

We can see crude oil having hard time breaking the lows, and the combination of the trend line and the support levels are causing crude oil to stall and go sideways.

Gold futures are still trading sideways in the same trading range for the past 5 straight days from 1244.2 down to 1234.3, which are all-time highs for gold futures.

We are still in the middle of the bullish channel pattern, and we marked up our trend lines to confirm a sideways wedge pattern as well.
I always want to trade with the market, not against it, and that means the following:

- Buy with the bulls
- Sell with the bears
- Buy with momentum UP
- Sell with momentum DOWN
- I need to take FULL responsibility for my trading results, and DON’T blame the market

o This helps me learn to get into a rhythm with the market.

- You don’t need more analysis, you need a different attitude: listen to the market, don’t tell the market what to do.

Which is better? (trade management = set it and forget method)

- Getting stopped out at your point of entry but you were waiting for a 50 tick move

- Getting stopped out with 10 more ticks because you were aggressive with taking profit to the bank!

Questions:

- Is it better to scalp the futures markets in the slow summertime markets?

o NO! its much more important for a scalper to have SPEED of the tape and lots of VOLUME.

o Day traders, swing traders, position traders are looking for LARGER moves, and larger moves don’t necessarily require volume.

 We see BIG moves on low volume all the time during the summer.

 Our ability to adapt to this change is the 200% reason why we made so much money this summer.

- Trade room schedule:

o Closed on the 2nd of September, and re-open the trade room on the Monday 13th, Monday after labor day holiday

o Sales@SchoolOfTrade.com will be open the entire time
o Support@SchoolOfTrade.com will be open the entire time
o JJ@SchoolOfTrade.com will be working the entire time.
o 10% off before Labor Day!!!!
o 10% increase after labor day!
o 20% savings if you register by the Labor Day Holiday..

- When will volume return?

o The Monday after the holiday week of labor day

o You may see some decent volume after next weeks holiday, but the majority of traders will be on vacation.

- What do I do for the next 10 days while JJ is gone?

o Make sure I understand all the materials

o I would practice my tape reading strategies

More tpe reading lessons available Here.

o Use your market replay to replay the price action from earlier this month or last month

 As an advanced member you get the charts, the data, and the market replay recorder.

 Log into your adv course for more info on how use market replay, or check with NT support on how to use it.

 In the NT control center, MISC, Run market Replay Recorder, (covered in the adv)

- When you travel bring with you:

o Extra extension chord
o Extra long Ethernet cable to connect to the wall

 No wireless!!!

- Compensating factors

Scalping, Swing and Day Trading with Sideways Markets, Channels, Wedge and Horseshoe Patterns

- Wedge, Channel, Horse-Shoe, Sideways Markets and How To Trade Them.

o Sideways Market

 The narrower the trading range, the less likely you will be able to sell the highs and buy the lows
 More likely to see a breakout of the trading range when it is very narrow.
 We don’t want to trade the middle, so a narrow range means the middle is more present.
 Slow speed at the edges means the market WANTS to stay sideways
 Fast speed at the edges means the market is just waiting for more time to break out.

o Wedge Pattern

 A little more advanced, this is when the sideways market begins to narrow in a pattern that looks like a ‘wedge’

 Wide range gives us plenty of high percentage opportunities trading inside the wedge

 Narrow wedges pose a definite threat to our trade because we know to stay away from the middle, and a narrow range has a more present middle.

 We don’t want to fall victim to a fake-out breakout and that is what happens with narrow trading ranges.

 Speed increasing in the middle of the wedge the market does NOT want to move above/below the wedge and wants to stay where it is.

 If we see slower speed in the middle, and rising speed at the highs/lows this tells us the market wants to break out, so be ready for it.

- Channel Pattern

o Slightly more advanced than the wedge, but still pretty easy to find.
o Markets trade in channels all the time, but most often when the market is slow and low volume/speed.
o First step to identifying a channel is drawing your major trend lines on your slower timeframes.

o Once you see the potential for the channel, copy and paste the same trend line that made the 1st part of the channel, and then drag it to the spot where it should go

o Look for the most # of times the market ‘tested’ the channel to define where the channel high/low should be.

o Wider ranges for channels make it easier for us to sell the highs and buy the lows

o Narrower trading range make it very difficult to trade within the channel, so we need to wait for the breakout.

 Trading breakouts with a channel are easy when you are trading against the trend of the channel
 More difficult when you are trading with the trend of the channel

- Horse-shoe Pattern

o When the market is trading in a ‘U’ shape, rising and then falling, then rising and falling again.
o Find your MAIN swing-low/high, where your trend lines will begin.
o Then find the swing-highs/lows as the market dropped/rises
o These trend lines will act as support and resistance through the day.
o How do we trade with these?

 Using these trend lines as support and resistance
 I wont use the trend line for ENTRIES because its sloppy around trend lines
 I will use my trend lines as profit target.

- How many days market data do you use for your charts?

o Fast charts = 5-10 days
o Slow Charts = 90 days (trend lines, auto levels)

- Can we apply the Fast Track Method to the ES and FDAX

o ES = 6-8 tick target, with 6-8 tick stop

 20-tick stop/target
 Always use 1:1 risk/reward ratio
 Trade with a 8-range and 13-range chart
 ES uses a different POT template
 ES uses a different FILTER for the time and sales

o FDAX = very similar to crude oil

 10-tick stop/target,
 20-tick stop/target
 Trading with 8, 13, and 21 range charts
 FDAX uses the same POT
 FDAX uses the same Filters
- Average true Range

o Measures the trading range based on the chart timeframe
o I use a 2-3 minute chart for ATR
o Im watching to see if its rising or falling
o I don’t watch the specific indicator value, only whether its rising or falling.

- Where do your stops go on the 13-range charts?

o Use the support and resistance in the market
o Never be the same from one trade to the next
o Scalpers use the same trade management on every trade, that is not the same with day traders using slower timeframes.

o Watch this video on the blog:
o The advanced course is where you will find all the exact specific instructions.

- Using the Pressure Point entry technique

o Wave entries

- Our trade room schedule:

o Closed from 2nd and re-open on Monday 13
o Wed we are closed and then re-open the 13th, which is the Monday after labor day holiday
o Sales and support teams will be working the entire time
o Trade room will be closed during that time.

- Best way to trade a small account

o Find a market that fits your needs as a trader
o Crude, gold, Russell, Euro
o Find the best pattern you want to use

 Breaker
 2-step
 Wave

o Learn your entry rules like the back of your hard
o Know your trade management

 1-contract trading has NO trade management

 Watch this video on the blog:

 You can get ALL the specific details for 1 contract trading in the advanced course.
 Identify your max loss and profit goals for today

• Important that a new trader with a small account has a well defined plan of attack when it comes to handling losses.

 Smaller accounts tend to make our job more difficult, and patience is the key component to successful trading with that small account.


- Our trade room schedule

o Open 745am
o Close around 1245pm EST

 Summer time = 1130am slow volume

o No trade room in the afternoon, I work with all of our members on 1-on-1 basis.

- Does the Euro Open give us good opportunity?

o 3am EST to 6am EST is a great time to be trading markets like:

 FDAX
 FTSE
 FESX
 Euro
 Pound
 Aussie
 Crude (if we have volume)
 Gold (if we have volume)

Buy the low of day on Euro Futures with Dollar Index Correlation for 40 ticks

830am EST

Crude Oil futures have recent made new lows last week and now the market has bounced back off the lows and trading just below 75.00

Fast timeframes on crude oil show a sideways market all day morning today.

Gold Futures are still trading at their highs of 1240, and trading sideways in the middle of the channel candlestick pattern.

The faster timeframes on gold show us a very sloppy and sideways trading range.

Euro Futures are trading sideways at the big round number of 1.2700, and we also see the market at the bottom of the channel pattern.

The fast timeframe on the euro shows very flat sideways trading.

eMini Russell Futures are trading above the broken head and shoulders candlestick pattern.

We broke below 600.00 last week, and then we saw the reversal off the new lows to come back up above the big round number.

Now above the 600 we should be considered either sideways or bullish in market sentiment today.

Faster timeframes on the emini Russell show us grinding slowly down the lows of the day as we go into the morning session of the emini’s.

Morning Routine:

- Begins with identifying our daily news (schooloftrade.com/news)
- Set my alarm for the news events we have today
- Open my charts and begin to review the market structure today
- Start with the slow timeframes charts

o 90 days of market data
o Goal is to see the big picture of the market

 Multiple days of market information
 Daily, weekly, monthly highs and lows
 Double-tops and bottoms
 Trend lines

• Define the overall market structure and they provide additional levels of support and resistance for us to use in our trading.

• Begin with the highs and the lows, and then I mark trend lines around the extremes of the price action, and then I look for more trend lines afterwards.

- With my trend lines drawn, my big round numbers and double-tops and bottoms marked I can now look for the trading range

o Summertime markets are going to show a lot of days with sideways, wedge, channel patterns, so we need to be on our toes looking for them.

o Find the highs and lows of the trading range, and don’t be afraid to look back at earlier price action to find a good trading range

- With my trading range defined, now I can avoid the middle, and wait for the highs and lows to be tested.

o Buy the lows
o Sell the highs
o Avoid the middle

- 900am EST

Crude oil futures are trading off the highs of the wedge pattern just below 75.00

We will look to sell the highs of this wedge, so looking for a breaker short pattern or a 2-step reversal pattern short at these highs.

Sideways market and very slow on the fast timeframe of crude oil.

We notice that we just broke the bullish channel pattern that formed last Friday, and now we’re trading sideways at 75.00

Gold futures are still trading at the highs from last week, and we can see a clear sideways market at these highs.

Further investigation into the price action shows the market has taken a ‘capital protection’ structure, with lower volume at the edges, and the highest volume in the market in the middle of the sideways range.

What does that mean?

- When the most volume is at the edges (not what we see today), this market is expected to breakout.

o Use a breakout pattern to buy the above the highs and/or sell below the lows.

- When the most volume is in the middle, expect the breakout to be a fake-out.

o Im looking to sell the highs and buy the lows because we have a strong feeling that the market will reverse off the highs/lows back into the same trading range as before.

Gold fast timeframe shows a very tight and narrowing trading range, and our biggest concern is because we see the market trading at 1237.7, which is the OPEN from last Friday.

We consider the OPEN levels to be the ZERO line, which means if we are trading back at the same price level as the OPEN that NOTHING has happen, so no change in market sentiment.

Very big concern that gold is trading sideways at the OPEN from Friday because we know that Friday showed us almost nothing for trading opportunities, so that tells us we will likely see much of the same today.

With that said, gold will be on the bottom of our trading list until it gets away from the OPEN of the day.

Euro Futures

Slower timeframes show us at the lows of the bullish channel, so we should be looking to buy the lows of the channel

However, we also see a sideways wedge pattern which is very tight and almost ready to break out of the wedge.

We see a small problem…we are in the middle of the wedge, so we cant buy the lows and sell the highs, and we are also in the middle of the sideways trading range from 1.2768 down to 1.2665

Russell Futures are trading in the middle of the wedge pattern on the slower timeframe, and trading in the middle of the sideways trading range on the fast and slow timeframes from 620.9 and down to 606.1

We need to avoid the Russell in the middle of the range, and look to sell the highs and buy the lows.

We may be waiting for the first pattern on Russell to trigger for some time while it trades in the middle.

930am EST

- At this point we should be seeing enough SPEED to make the pace of tape indicator to turn YELLOW/GREEN, but we don’t, we have no speed and a very quiet market.

- We’ve already gone through all the different steps to our morning routine, and now we wait.

- Remember that when we see slow summertime speeds, now is a good time to look at our slower charts for more broad patterns.

- Rather than be a scalper with such slow speed and sideways trading, the better option will be a day trader or position trader.

- Lets grab our 8, 13, and 21-range charts and look for more patterns that may be setting up.

1100am EST

- The market is trading VERY slowly today and now we have the end of the day coming soon.

- We don’t have any reason to wait for the Euro session close at 1130am because of the federal holiday in the UK (end of Summer Bank Holiday)

- We heard a national hurricane announcement for Earl, but the market didn’t react, so we may see more from hurricane Earl later this week.

Using The Correct Support And Resistance When Trading Futures

Questions:


- Different levels of support and resistance, which does what?

o Which levels do we look for trades with?

 Auto Levels (RED and YELLOW)
 Swing Levels (Light blue)
 HOD/LOD (blue)

o Which levels do I avoid?

 Open of Day / Close of Day
 Trend lines
 Big round numbers (74.00, 1.2700, 1200.0)

o Major? Brick Wall of Price

 Slower timeframe levels (auto levels)
 Trend Lines on the slower timeframe
 Double-tops and bottoms on the slower timeframe

o Minor? Broken easily

 Everything on the faster timeframe
 Swing highs/lows on the swing indicator
 Trend lines on the 4-range chart (fast)

- Drawing Trend Lines, when is it too much

o Video and article on the blog about trend lines

- How do we find the time to enter our trades accurately?

o Start slow and work your way up
o You’re not gonna trade 4 different markets the very first day you trade
o Focus on 1 market at a time, master your trading on the 1 market, and then expand.
o Traders love to make this harder on themselves by trying to do too much.

- Dollar Correlation: read the article on the blog

o Watch the video and read the article on the blog
o Negative correlation

- Trade Room Schedule

o Open Monday, Tuesday, Wednesday

 Moving next Tuesday 31st, early close next Tuesday

o Trade room closed as of the 2nd, and re-opens on the 13th, the Monday after the Holiday weekend.
o Support and Sales teams are open, and Joe will be on email.

Trades Set-Up On Gold And Euro Futures

Gold Futures

Watching gold futures are one of the early movers this morning, and we’re looking for a long entry above 1240.3 as we break up off the lows of the wedge pattern.

This will be a little bit tight for our first profit target, so be sure to have your first target ready to get filled after your entry.

Entry long above 1240.3, with profit targets of 41.0 (1/2), 43.0 (1/4), and then if we can break the highs of the wedge at 1244 we can then try to get a little more profit out of this trade all the way up to the highs of the day at 1245

Gold Futures 13 Range

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Euro Futures:

The Euro Futures are trading in almost-sideways, slightly bullish channel pattern

We are in the middle of the channel, so our best option will be to wait for the test of the lows, or the test of the highs.

Best opportunity looks to be to wait for the market to come down and test 1.2675, then look for a 2-step reversal pattern at the lows for an entry long above 1.2675.
 

Euro Futures 13 Range

Euro Futures 13 Range Up-Date

Russell Futures

The Russell is trading at the highs of the channel, so we have a selling opportunity with the 2-step reversal

Sell short below 611.4 with momentum confirming and profit targets of 608.0 (1/2), 606.5 (1/4), and then all the way down to the lows of the channel at 601.0 (1/4)

Russell Futures 13 Range

Russell Futures Up-Date

We didnt see the momentum indicator confirm on the first entry short on the russell, so we skip the first move, and now we ahve another entry selling opportunity below 609.9 with momentum now supporting our short.

Russell Futures 13 Range Up-Date

Crude Oil Futures:

Crude Oil is trading at the highs of the channel on our 13r so we want to get short below 74.22 with targetrs of 74.05, 73.80, and then down to the lows of 73.05 which is the bottom of the trading range.

We can also buy the lows of the range above us with entry long above 74.45, with targets of 62 (1/2), 95 (1/4), and then 75.45 are the highs of the day (1/4)
 
We also see resistance overhead at 74.55, so this will also be a perfect first profiot target or the LONG entry.
 

Crude Oil Futures Short

Russell Reverses + Crude Oil Drops = 150 Ticks Scalping

830am EST


Crude Oil futures are trading sideways market at 73.50, which is slightly off the lows of 71.00 from yesterday.

Gold futures are trading sideways market at 1240, just off the high of the week, and all time highs of 1245.0

Euro futures are trading completely sideways at 1.2715, which is basically where we’ve been trading all week.

Russell Futures are trading in a sideways market at the big round number of 600.0, and interestingly we are now trading back above the head and shoulders candlestick pattern.

845am EST

Crude Oil Futures:

- 34-range chart shows sideways markets from 73.75 down to 72.69

- Our faster timeframes show wedge patterns and we are trading at the highs of the wedge, so we are looking to sell those highs around 73.75.

- We can see support levels on crude oil at 73.40, which is right in the middle of the wedge pattern, which means we really need to stay focused on the highs and the lows, and avoiding the middle of the bracket.

Gold Futures:

Our 34-range chart shows a well defined sideways trading range and bullish channel pattern.

We are not at the highs or the lows of the channel pattern, so my main focus on gold is the sideways range.

After further analysis of the sideways range, we can easily see the market has gone into ‘protection’ mode, which means the market participants are looking to protect their positions by entering the market in the middle of the range.

I can confirm this assumption with the following:

- Candlestick patterns at the highs and lows confirm sentiment

- Volume at the middle is greater than volume at the edges (extremes)

- Flat trigger line in the middle

- All of this tells us that a breakout without higher volume will be very suspect of a fake-out.

- Watch the volume, and if the volume is higher at the breakout take the trade!

- If the volume is lower at the breakout, consider this a fake-out breakout and watch for the 3 signs of price reversal

o Slowing speed
o Momentum curls
o Big buyers/sellers against your position

Day Trade or Scalp? Swing trade or Position trade? Which trade should I take?

- Choosing the correct trade for your trading style


o I have the same pattern setting up on 2 different charts, 1 is very slow and the other is very fast
o Which trade do I take?

 Identify the trader first

• New trader
• Lack confidence
• I have small account
• Low risk tolerance

 Identify the market second

• Fast speed
• Good follow-through
• Lots of movement

o I take the SCALP because of the following reasons:

 I have a low risk tolerance so my stop needs to be tight, and I cant afford the 40 tick stop I would need on a 34-range chart

 With lots of speed the scalps will always work well
 Slower speed is much more difficult for the scalpers

• New example

o 13range and 4range setting up together
o I have slow speed, and NO follow through
o I have a small account, and low risk tolerance
o Which do I take?

 Rules of thumb:

• Small account = faster timeframe
• Large Account = anything
• Slow Market = slower timeframe
• Fast Market = both
• Low Risk Tolerance = faster timeframe
• High risk tolerance = both

- 3 Signs of a price reversal:

o Slowing speed
o Momentum pointing against you
o Big money buyers/sellers against your trade

- How do we know when to flatten at entry?

o Use the 3 signs of a price reversal

 Speed slow down
 Momentum curls against me
 Big sellers/buyers against my position.

o Remember, we use the OPPOSITE of this to enter the trade

 I saw good speed to enter the trade
 Momentum confirmed
 Big buyers/sellers to support the trade

o Now once im in the trade, I begin to see something is wrong

 Speed slow down
 Momentum curls against me
 Big sellers/buyers against my position.

o When I see that I have 2 options:

 Move my stop up to my entry and let it run
 You can FLATTEN your trade by clicking the CLOSE button on your DOM or chart trader.
 Keep a close eye on some additional things

• Point of entry

• MACD on your trade management chart

• If this applies before you fill your first target, you still have RISK in the market, so move that stop to entry, or simply flatten.

- What is your stop using your 13-range charts?

o Stops for scalps?

 Always the same, and this is different than day traders’ trade management.

- Drawing channels, wedges, and sideways ranges

- Trading Freefalls and Rises

o Big difference between these two things:

 Market falls on volume
 Market falls on NO volume

• I can see volume with the following:

o Pace of tape indicator increases in speed
o Big money on the time and sales
o Watch a volume counter technical indicator

 High volume = expect the move to continue
 Low Volume = expect the move to reverse and go back up most likely to where it began.

- Scalping Fast Track?

o Yes you can, use the following trade management

 6 tick target, 6 tick stop
 8 tick target, 8 tick stop
 4 and 8-range charts
 Most important things to watch will be speed and momentum

- Entries for our trades

o Do not use market orders, too sloppy
o I use limit order, buy/sell stops, according to our TRAP ENTRY technique.

- Max loss, daily goal? How do we react to these?

o Daily goal = $1000usd for 4 contracts
o Max Loss = 2 full stops in 1 day

 After my max loss, I will move to DEMO/SIM to keep trading
 I want to keep trading so that I can build my confidence back to where it was.

- Compensating Factors:

o Good speed is more important than anything else.

Sell the Highs Day Trading and Scalping Crude Oil Futures

We can clearly see the affects of summertime trading in the month of august this morning.

Gold going sideways at the all time highs of 1245.0

Crude Oil has popped back up above 73.00 and trading sideways

Russell has been back and forth above and below the big round number of 600.0

Euro continues its week-long sideways trading range as it chops around the big round number of 1.2700.

Pace of tape indicator is all red across all the markets, so we can see that speed is lower, so lets be careful to wait for that speed to improve today.

Crude Oil Futures:

We are trading in the bracket above us from yesterday, the highs of 74.00 we will sell, and then buy the lows of 72.54.

If we break into the bracket below we will sell the highs of 72.54 and buy the lows of 70.76.

The biggest concern I have with crude oil is that we are trading right in the middle of the range and we have this trend line that correlates to the horse shoe pattern.

We see our first trade of the morning setting up for a 2-step reversal day trade on crude oil.

We skipped this first trade because we had concerns it would be a fake-out breakout!

Price reversals (click to learn more about price reversals) happen all the time when you have overbought or oversold momentum, and that’s what told us to stay away.

Good idea! It would have stopped us out.

MACD Technical Indicator Day Trading Gold Futures Crude Oil Euro

- How to use the MACD on our trade management chart


o MACD = Moving Average Convergence/Divergence
o Trade management chart helps us manage our trades, no matter what type of trader you are.
o At the bottom is the MACD

 More info in the Beginner’s Course on this indicator
 Advanced Members will OWN this indicator
 King of all LAGGING indicator

• Lagging = late to the party
• Used for EXITS, never for entries

 I use the MACD many ways

• Looking for the MACD to be above/below the zero line.
• I watch the moving averages to see if they are above/below zero line and rising/falling
• Divergence in the histogram

o Did we get higher highs on the histogram along with higher highs on the price?

• Look for the histogram to break below the zero line, only to snap back up above

o This should happen quickly
o With all the different ways you can use this, remember to use it with your exits.
o MACD says to get long, I should be covering a short, not entering long, its too lagging.

- Different timeframe charts

o Slow = 34 range
o Fast = 8 range and 4 range
o Fast = 21 13 range

- Watching the Dollar

2-Step Reversal Setting Up On Crude Oil

Crude Oil Futures:


- We bought the lows on crude oil at 73.17 and and took profit at 73.50 for a nice winner on the long side.

- We then tried to take the breaker long above 73.80 but momentum and price action made it impossible to hold the trade so I exited for a scratch.

- Now we look to sell the highs with a 2-step reversal pattern below the trigger line at 60’s

- First target of 55 (1/2) is from the next level of previous resistance, 2nd target of 35 (1/4) and then final target all the way down to the big round number of 73.05 (1/4)

Crude 13 Range

Scalp Trading Crude Oil Futures after Head & shoulders Candlestick Pattern

820am EST


We can see almost all the markets today have risen in price and then folded back down to the lows, showing clear head and shoulders candlestick patterns, and now trading at the lows.

If you recall, we were trading at the lows yesterday as well across all markets.

The key today are the candlestick patterns. We see all of our markets reversing off the highs and now trading at the lows.

Euro Futures:

- Watching the 34-range chart we see us trading just below the TRIGGER ZONE so we have 2 different options

o Buy the lows if we re-enter into this bracket above 2628
o Sell the breakout into the bracket below us looking for entry below 2587

- We entered our first trade of the day on the Euro buying the lows of the trigger zone, with an entry above 2620

o I didn’t follow my rules, and prematurely got into a trade with our 13-range trend lines in our way
o A good lesson to learn this morning…check your rules first!
o We got out for a scratch, losing a few ticks in the process, but much better then a full 6 tick stop.

Crude Oil Futures:

- The 34-range chart is now trading below the quarterly lows, and below the swing low level at 72.52 that has been holding us up for weeks now.

- No more horseshoe pattern now that we’ve broken those lows
- We also see a channel down on the 34-range, and we are trading at the lows of the channel

o Buy the lows above 71.86
o Sell the highs below 71.00

 The biggest concern for the short sellers right now is the lack of support due to these new lows.

- The key on crude oil today will be getting farther away from the downward channel line around 71.30

Gold Futures:

- 34-range chart shows the gold trading at all times highs yet again today around 1243.0
- We notice 2 things

o a bullish channel on the 34-range and we are trading at the highs of the channel
o sideways trading range from 1243 down to 1231, and we are at the highs of that range
o 2 options

 Sell the highs around 1243.0
 Buy the lows around 1231.0

o Need to be careful because we can see a lot of support at 1240, so look for the price break down if we can get below that level.

o Be careful with the scalps buying above 1243, with that trend line overhead that will be a tough spot.

Russell Futures:

- 34-range chart shows us trading down to the lows of the trading range this month
- We also notice that 600.0 is our pivot

o Head and shoulders pattern shows us the reversal and the break below 600.0
o So we will buy above 600.0 and sell below 600

- We also see that we are in the middle of the bracket from 584.3 at the lows up to 600.0 at the highs.

o Sell the highs at 600
o Buy the lows at 584.3

Day Trading Fast Track With A Live Margin Account.

- Fast Track method, and going Live


o We did members training on July 14th 2010, so watch the video on the Fast Track Method for more info

o Intended for new traders or experienced traders looking to kick some bad habits

 Uses pre-determined entries (3-set-ups)
 Uses limit orders for entries
 The goal is NOT making money
 The goal is LEARNING, and the byproduct of learning is MONEY/PROFIT
 Teaches you patience, discipline, and how to handle a loss.

 You are going to take losses, but with our 1:1 risk/reward ratio (trade management) on the fast track this teaches us to trust our rules and wait for the final end of the week result.

 Start on DEMO, and then after 2 weeks of consistency in making MONEY then move to your live account

o Example:

 New trader
 Trading on a DEMO using the Fast Track
 Ready to go live
 But wait! Its August, and this time of year is the most challenging you will see
 As we get closer to labor day, it will only get worse
 Keep practicing, with the intention of going live the first week after labor day holiday
 13th of the month of September
 Lets assume you have a small account (< $2000)

• 1-contract, 13-range chart with a 10/10 (stop/target)
• 1-contract, 21-range chart with a 20/20 (stop/target)

 Let’s assume a large account

• 1-contract, 13-range chart with a 10/10 (stop/target)
• 1-contract, 21-range chart with a 20/20 (stop/target)
• Or we can also trade larger

o 2 contract (trade management will be the same as always)
o 3 contract
o Etc.

 You don’t need to change the way you’re trading after 2 weeks if you don’t want to stop trading the Fast Track

• Just move to live trading, and start adding contracts.

 Start with 1 contract, same 10/10 (stop/target)
 Every 2 weeks add another contract, assuming of course you made money those 2 weeks
 So after 6 week

• 2 weeks on demo
• 2 weeks on 1 lot
• 2 weeks on 2nd lot

• You could also add contracts as soon as you have earned another $500 / $1000 in your account, depending on the margin per contract.

 Some traders, myself included will stop trading after 2 stops

• Summer time markets have lots of fake-out breakouts
• This makes our limit order entries much less profitable than during other times of the year.
• Right now (summer) the Fast Track is NOT going to be the best option simply

What are 3 ways to manage your trades?

o Using the Pink line on the Trade Management Chart
o Discretionary exit using the MACD, POT, Momentum

 Example: Long trade I will flatten my trade when I see

• MACD below Zero line
• Momentum pointing down
• Red Pace of Tape with Sellers

o Set it and forget it! Set the final target and we wait for it to be filled.

 Plan your first 2 targets, and then let the trade run.
 Example: scalp entry long on the crude oil

• My profit targets of +5/10 or +4/8 get filled, and then I will identify my FINAL target and then sit back and watch it run

o My stop will be at my entry +1tick to make sure I don’t lose any money when it gets filled.

- Trading inside a sideways market

o What do I do if im in the middle of the sideways market? Where can I trade?

 You gotta wait!

o Sell the highs, buy the lows, and avoid trading the middle

 If you’re in the middle, you need to wait for the highs or the lows to be tested.

- How many ticks away from the Red ‘Auto Levels’ is considered ‘too far’ or ‘chasing’

o The average trader we begin chasing after 5 ticks

- Trend Lines, when do we draw them?

o Morning Prep every day @ 745am – 830am EST we set everything up

 Trend lines
 Notice our patterns
 Define our potential trades for the day ahead
 You cannot put a value on this morning prep.

- Easiest way to find a wave pattern

o After a breakout, when the price begins to pull back /retrace off the new highs/lows

Day Trading Patterns:

Gold Futures:

We’ve already taken over 150 ticks out of the gold market on the way to new highs today, and now we’re looking to sell these highs to make money on the way back down.

We can see a 2-step short setting up on the gold 13-range chart with entry below 33.4.

We have a trend line at 33.5 on the 21-range which is acting as support, the best option is to make 100% certain we break that trend line and take entry below the 33.4

Targets will be 32.5 (1/2), 31.1 (1/4), and then all the way down to test the channel highs at 27.0 (1/4)

We can also look for a breaker long, as we do expect the highs on gold to be tested again today.

Long above 36.1 with profit targets of 37.2 (1/2), 39.0 (1/4), and then all the way to the top of the channel at 40.0 (1/4)

Euro Futures:

The euro just tested its top of the channel at 2710, and now we’re looking to sell the highs of the channel.

We have a 2-step short reversal pattern setting up on the 13-range chart.

Looking for entry below the swing low of 72, with profit targets of 65 (1/2), 50(1/4), and then down to 2615 which is the next support level.

You can also use tape reading to determine if you will hold this trade through 2615 (1/4)

If we see big sellers and lots of SPEED at the 2615 level, look to hold the trade through 15 down to 2590.

At 2590 I will do the same, read the tape looking for large sellers and if we have increasing speed with those large sellers I will then hold my final target down to the bottom of the channel at 2570 (1/4)

Two Different Trading Options On The Russell

Russell Futures:

Trading inside the bearish channel and we have 2 different options.

1. If we can break above the trend line and the resistance level at 94.4, long above 94.4, with profit targets of 96.0 (1/2), 98.0 (1/4), and then all the way to the highs of the channel around 600.0

2. We can continue with the short side entry below 590.5, with profit targets of 88.7 (1/2), 87.2 (1/4), and then all the way down to the lows of the channel at 584.3 (1/4)

13 Range Russell

Euro Futures:

The euro has a bearish channel and we have tried unsuccessfully to break out of that channel, and im looking for a short entry back into the channel by selling the highs

Short below 2632, im watching my 4 and 8-range charts for the entry

Profit targets of 2620 (1/2), 2610 (1/4), and then all the way down to the lows of 2593 (1/4)

13 Range Euro

Scalping Gold and Crude Oil Futures Sideways Markets

Everything we’re watching is trading at the low of day.

Crude Oil, Gold, Euro, all trading at their lows this morning when we open our charts.

The Dollar is sideways at the OPEN, so this is a little misleading.

These lows appear to be premature because the dollar has not broke the highs of its trading range, which means the new lows are not fundamentally being taken down.

Check out the blog for the ‘Dollar Index Correlation’ to learn more about how the Dollar affects everything else.

Crude Oil Futures:

We can see the new lows being tested on crude oil when the dollar makes new highs

The slower timeframe shows us now trading below 72.00 and we are in a strong downtrend market.

Looking to sell with the current trend below 72.02, and we can look for a reversal and buy above 72.18 which is above the trend line at 72.10.

The key right now will be finding ways to trade SHORT with the trend, without chasing after anything outside of our rules.

We don’t want to get emotionally attached to the short side, but when we cant see a sideways range, we need to trade with the short term trend, which is down.

We will also watch out for a sideways range developing around 72.00 which will give us some more feedback from the market.

Gold Futures:

We can see gold futures trading in a sideways range from 1218.4 down to 1212.3

We know in a sideways trading range that we should buy the lows and sell the highs. Im looking to buy around 1213 and looking to sell around 1218

900am EST

- We’ve made 2 trades today, both were winners

o First trade on gold was easy, buying the lows of the trading range at 1213.3

o 2nd trade was more challenging because we tried to scalp selling the lows of the crude oil, and the breakout didn’t go very far.

 Watch the dollar looking for the dollar to move first, and then we can look for the breakout on crude oil

 In the meantime, lets try and trade buying the lows and selling the highs until the dollar can break out.

Euro Futures:

We’ve broken down below that sticky level of 2682 and now we’re trading in the bracket from 2700 down to 2500

We have support at 2600 which is causing a little bit of chop, so we will avoid this area for the time being.

We see support at 2524, and this is where we can see the highest probability trade ahead of us.

I’m looking to buy the lows at 1.2524 for a reversal off the bottom of this trading range.

One concern is that we can see we’re at 2600, which is both a big round number and in the MIDDLE of the trading range we’re in.

1000am EST

Dollar breaks out and makes new lows, which should make the rest of the markets rise!

Crude Oil futures remain sideways around the big round number of 72.00, and we know this level is going to be the ‘pivot’ for us to be buyers or sellers.

We can see a bearish channel developed on the crude 13-range and we are trading at the LOWS of this channel, so we should be looking for a buy opportunity back into the channel highs.

If we continue to break below the channel on crude we will look for the next opportunity to sell short.

Market Profile Day Trading Entry Rules and Compensating Factors SchoolOfTrade.com

This is going to be an overview of how we use market profile.There are hundreds of ways to earn income as a trader, this is what I see as the best way to use this tool, known as Market Profile.

I think most traders are given the wrong information and they’re made to think that market profile is some secret weapon, when in reality this has been around for half century already. Check out the video below for a tutorial over Market Profile.

How do we trade it?

Define the value area bracket, next Download the indicator. If we stay inside the value area bracket from yesterday we can trade long or short with the same effectiveness. Look to buy the lows and sell the highs. Stay away from the middle (point of control, POC).

If we break out of the bracket we have a couple of different options, depending if the break is to the long or short side. If it breaks to the long side = buyers are in control and we are looking for a long entry. If it breaks to the short side = sellers are in control and we are looking for a short entry.

How do we make MONEY with this?

- Example: price trading below the VAL, so you use a 4-range chart and a breaker short pattern to sell those highs of the bracket below us

- Example: price is trading INSIDE the VA bracket, I can short the highs or buy the lows with a simple 2-step pattern

In conclusion

I will use the VA Bracket to show me where the market see value. If we trade inside the bracket, I’ll sell the highs and buy the lows. If we break out of the bracket I will buy above or sell below the bracket.

Why don’t we see this being used? Trying to keep things as simple as possible and this is a little more advanced.

MP Indicator, what times do you set it for? The open and close times from the exchange:

o E-mini = 930-415 EST
o Crude Oil = 900 – 230 EST

2-Step Short Setting Up On The Gold 13 Range Chart

Gold Futures:


We’ve already taken over 150 ticks out of the gold market on the way to new highs today, and now we’re looking to sell these highs to make money on the way back down.

We can see a 2-step short setting up on the gold 13-range chart with entry below 33.4.

We have a trend line at 33.5 on the 21-range which is acting as support, the best option is to make 100% certain we break that trend line and take entry below the 33.4

Targets will be 32.5 (1/2), 31.1 (1/4), and then all the way down to test the channel highs at 27.0 (1/4)

Gold 13 Range Chart 2 Step

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Trend Line, Gold 13 Range Chart

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
We can also look for a breaker long, as we do expect the highs on gold to be tested again today.

Long above 36.1 with profit targets of 37.2 (1/2), 39.0 (1/4), and then all the way to the top of the channel at 40.0 (1/4)
 

Gold 13 Range Chart Long

 
 
 
 
 
 
 
 














Euro Futures

The euro just tested its top of the channel at 2710, and now we’re looking to sell the highs of the channel.

We have a 2-step short reversal pattern setting up on the 13-range chart.

Looking for entry below the swing low of 72, with profit targets of 65 (1/2), 50(1/4), and then down to 2615 which is the next support level.

You can also use tape reading to determine if you will hold this trade through 2615 (1/4)

If we see big sellers and lots of SPEED at the 2615 level, look to hold the trade through 15 down to 2590.

At 2590 I will do the same, read the tape looking for large sellers and if we have increasing speed with those large sellers I will then hold my final target down to the bottom of the channel at 2570 (1/4)

Euro 13 Range Short

Day Trading Euro and Crude Oil Futures

830am EST

Crude Oil Futures:

- We’re trading the 10-10 contract after contract rollover last week
- We can see a massive ‘horseshoe pattern’ on our 34-range chart

- And we can also see that we have tumbled all the way off the highs of 83.00 and now here we are trading at the lows around 73.00 to define a massive sideways market.

- We define a sideways trading range from 74.29 down to 73.55

o Sell the highs of 74.29, and buy the lows of 73.55, this is the best way to trade a sideways market.

o If we can break out of this sideways market, we will buy above 74.40 to clear the trend line above, and then we will be sellers below 73.55 for a breakout to the downside.

- We’re trading at the highs of the trading range at 74.29 and we just popped our head out above the trading range, only to run into resistance overhead form the trend line.

- Now we’re looking to sell short below 74.29 when the price re-enters the bracket below 74.29.

9:30am EST

Gold Futures:

- Gold is coming off all time highs from last week
- 34-range chart shows 2 things of concern:

o We just broke below the bullish channel, so we need to wait patiently for a short opportunity below 1223.7 is the earliest opening

o We are in the middle of the sideways trading range from 1235 down to 1223.3, so we need to be careful trading in the middle

- Best options right now appear to be above 1234.0 for a long trade, or below 1223.7 for a short trade.
- Right now at 1226.3 we have to wait for a better situation to trade.

Russell Futures:

- The Russell made a nice big move down from the highs of 615, but we had a hard time getting into the trade because of the location.

o once we broke below the OPEN/CLOSE of the day (which we avoid) we went right to the middle of the trading range, and now we must wait.

o Avoid the middle and wait for the Russell to test the highs or the lows, or wait for a breakout

- Entry short will be around the highs of 609.4 using a 2-step short pattern
- Entry long will be buying the lows at 600.5 and using the trend line as support

o I like the 2-step long because that trend line at 600.0 will really help as support.

- Don’t forget we can also sell short below 599.0 just make sure we get below the trend line

- And we can buy the breakout above 60.9.4 but just remember we have the OPEN/CLOSE directly above those highs, so expect the market to go back to sleep.

Euro Futures:

- We can see the Euro trading around the SAME price level from last week, so lets use the same brackets from last Thursday and Friday

- Looking to buy above