October 29, 2013
- in Uncategorized by schooloftrade
Simple Counter-Trend Day Trading Strategy for Gold Futures
Simple Counter-Trend Day Trading Strategy for Gold Futures
Every trader should have a counter-trend day trading strategy in their trading plan, and in today’s Trade-of-the-Day we will learn more about a simple way to trade against the long-term-trend.
The first thing we need is to have two chart timeframes. By using multiple timeframes we will identify a potential ‘turning point’ on the slower timeframe (anchor chart) and then look to find entry in the new direction using the faster chart timeframe (entry chart).
| Gold Anchor Chart |
We look at the slower timeframe first, and we use simple techniques to define the location where we THINK the price-action will give us a price-reversal.
Remember, we don’t know for certain that price-action will reverse off this area, so we need to be patient to wait for the entry pattern on the faster chart timeframe to capitalize on this reversal.
In today’s video we found SUPPORT on the anchor chart for gold, and we looked for a price-reversal off this level to lead us into our LONG trade on the entry chart.
Once we see the price-reversal on the anchor we then move to the entry chart timeframe to look for the entry pattern.
Every pattern we use has a set of rules to make sure the pattern is correct, so we stick to our day trading plan and follow the entry rules.
| Gold Entry Chart |
Assuming our entry rules line up properly, we enter the trade (long in this example) and we use the specific trade-management strategy that applies to that entry pattern.
The most important aspects of this simple counter-trend day trading strategy are to use multiple timeframes. The ‘anchor’ chart tells us where to LOOK for the trading opportunities and the ‘entry’ chart then gives us the low-risk and high-reward trading opportunities that we are looking for.
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