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Price Channel Day Trading Strategy for Crude Oil and Gold Futures with Dollar Index Correlation

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830am est
–          We have three important news events to watch @ 830am
–          How do we know what the market’s reaction to all of these events is?
–          Watch the dollar, this will be the reaction to ALL of the news events.
–          Manufacturing slightly higher than expected (good)
–          Retail sales lower than expected (bad)
–          Import prices higher than expected (bad)
–          1 good thing, and 2 bad things for the dollar
–          Falling dollar = rising gold = rising euro
–          Let’s wait and see what the reaction is
835am est
–          Check the dollar
–          Speed is ok
–          Average true range needs improvement
–          Dollar is trading in the middle of the range, after the news, this is concerning
–          The dollar should be MOVING after the news
–          We need to see higher highs or lower lows on the dollar to really get trading this morning.
840am est
–          Gold is setting up for a wave long into the highs of the price channel on the 13range chart
–          We see the BIG PICTURE on gold tells us to sell these highs b/c of the major resistance overhead
–          We need to be careful buying into the highs
915am est
–          Everything after 915 before 935am est is higher risk
–          We took the fast track short off the highs on crude oil for an easy 10 ticks of profit per contract
–          We see the crude oil futures now trading in a narrow wedge pattern on the 13range chart.
–          Price is still very slow, and the dollar has not moved more than testing the lows and bouncing back up.
930am est
–          We’ve had 4-5 fast track winners today on the gold and crude oil
–          Lots of members making money and learning our method at the same time with the fast track method.
–          Looking to sell the highs on the gold futures
–          Momentum is oversold on gold, so wait for the momentum indicator to move overbought, giving us a better chance at success for a short trade
955am est
–          We took the wave pattern short on the 13range gold futures
–          We had to wait very patiently for the price to fill our targets, and while we were waiting for the fast track to fill, and the final target to fill we had to flatten ahead of the news.
–          “1 in the hand and better than 2 in the bush”
–          Id rather take my money NOW ahead of the news (even though the news may get me MORE profit) I would rather have the money NOW.
–          This decision was mostly based on the market’s personality
–          We didn’t see much action today so far, so I don’t think the market would have a big move waiting ahead.
–          We use the market’s personality to make educated decisions when trading ahead of the news.
1005am est
–          Housing market index is flat @ 10am
–          Business Inventories rise 1.1%
–          Lets watch the DOLLAR index for the reaction to this news
–          Everything pretty much as expected today at 10am
–          CRUDE OIL trading in the middle of the wedge on the 34range
–          Lets wait to sell the highs on crude oil around 85.77
–          Gold futures are still chopping around this 13range wave pattern / trigger line.
1030am est
–          We have crude oil at the lows, waiting to test the LOD
–          We’re looking for the 2step long pattern
–          We know that when the price has NOT tested the LOD we may want to wait to see the test first.
–          The best 2step price reversals come with a token print, or a 1tick lower low at the LOD
–          Speed is slowing down
–          Momentum is oversold, getting ready to trigger this long trade on the 4range chart of crude oil
1045am est
–          Crude oil sets up for a 2step long using the 4range chart
–          We see very few big money buyers, what could that mean for us?
–          This means the bias in the market is to the short side
–          Momentum is oversold, so im staying in this trade
–          Fast track winner!  We stayed patient and followed our rules and we got the win.
1100am est
–          We have obama speaking and the markets slow down into the lunch session
–          We now wait for 1130am est for the European close to see more volume.
–          Having a hard time getting gold to move, speed is very slow and price action very choppy and sideways.
–          The crude oil bounced off the LOD , we took the long off the lows for a big winner, and now we’re trying to define WHO HAS CONTROL over this price.
–          The buyers keep pushing price higher, but we have lots of resistance overhead and momentum is overbought
–          Long trades will be higher risk
–          We’ve also noticed that the BIG MONEY does not come as often
–          Lack of big money after 11am tells us to beware of falling speed and lacking follow-through on the moves we see the rest of the morning.

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    Miguel - February 16, 2011 Reply

    nice video man! very good explanation! your're the man!

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