Live Day Trading Crude Oil Futures Wednesday 4-19-2017

There was an exceptional opportunity in the crude oil futures market today. The market’s movement over the past 4-1/2 months, including the post news reaction today, set the stage for an extraordinary shorting opportunity.

There was an extended horizontal development from Dec 2016 through Feb 2017. Starting in early March the market broke lower, as it sold off from the 54 dollar mark down to just below 48 dollars a barrel. For the past two weeks, the market had retraced itself and was once again trading in the 54 dollar area. That price was hit last Thursday the 12th of April. What was interesting to us was that the last push up to that level was made with a buying gap. A gap is a form of aggressive trader activity and is a formation we use frequently in our trade analysis. That buying gap was erased yesterday as the market dipped well below it and settled inside of it. Today the inventory news was released and the market quickly probed up to match the overnight high and then turned down. When the sell-off took out the low that was formed yesterday, the market picked up speed and sold off hard. By the end of the day, the crude oil market had closed some 2 dollars lower.

The key piece of information today was when the market took out the low from yesterday (the probe below the recent buying gap). This was when a short trade was entered. It was a significant development as the retracement back to the key resistance area (selling break-out starting point) of 54 dollars was again confirmed. The combination of these events offered a superb shorting opportunity.

The next two questions become: how heavily do we trade weight our position and how do we manage the trade once we’re into it. There are 3 options:
1-weight the trade as heavily as possible (in other words short as many contracts as you feel you can)
2-hold the trade for as long a duration as possible (maybe until the close of the regular trading hours)

We chose to balance out the trade weight and the hold duration. We trade-weighted by shorting a moderate 4 contracts but with the intention of holding the trade for as long a duration as possible, maybe even to the end of the regular trading hours. By using the ‘day trade the markets’ software we were able to manage the trade with several buy stop adjustments as the market steadily sold off. We exited the trade with a 145 tick profit per contract. At $10 a tick and with 4 contracts that’s a $5800 day-trade profit. This is a much larger day trading profit than we regularly attain but being in the game every day affords us the chance to participate in these monster moves.

This day trade tied together two main elements. Firstly, it all started with an understanding of the background condition of the market’s auction cycle. More specifically, the move below the aggressive buying gap up near longer-term resistance indicated a failure on the part of the bulls. Secondly, by using a shorter time frame interval analysis (‘day trade the markets’ software) we were able to identify an excellent trade entry location with just a few ticks of risk, as well as manage the trade with several buy stop adjustments as it continued to sell off. The synergy of these two key components offers traders the perspective and ultimately the insight to capitalize on low-risk day trades, not just monster moves.

Understanding Relative Aggression Bars

The video below explains one of the key features in understanding market behavior and the reason how markets move up and down.

Live Day Trading Crude Oil, emini S&P and Gold 2-7-2017

This is a video of 3 simultaneous trades on Tuesday, Feb. 7th 2017.

The emini S&P had moved above a resistance area from two days ago. A long trade was entered but failed to rally. The 2 contracts were stopped out for a 5 tick loss. Net result on the 2 contract trade was a $125 loss.

The crude oil had opened with fierce selling. The market had bounced about half way but when selling came back in the market did not make a new low for the day. Instead, the selling was aggressive and was rejected which offered a long trade opportunity. The trade was entered with 4 contracts at 2 locations. The first objective of plus 15 ticks was reached and 2 of the 4 contracts were exited with a limit order. The second half of the position was exited with a stop order for a 6 tick profit per contract. Net result on the 4 contract trade was a plus 42 tick profit or $420.

The gold market has been in an up interday auction and confirmation of that bias was exhibited early in the trading day. A long trade of 2 contracts was entered once a rejection of aggressive selling had been confirmed. The first objective of plus 21 ticks was reached. The second contract was exited with a stop order for a plus 24 tick profit. Net result on the 2 contract trade was a 45 tick profit or $450.

Live Day Trading Emini S&P 500 futures 5-18-2017

The emini S&P had a big down day yesterday which moved through two recent small buying gaps and tested into a third very large buying gap. There was a slightly lower open for the regular trading hours today. The market then dipped a few ticks below the large buying gap low before bouncing to yesterday’s late intraday swing high. That swing high was a known resistance area that was our short trade entry preference.

The entry was made after the market probed above that resistance and then tested that high. That bounce allowed us to get short in the 2366 area. The trade moved quickly in our direction for a maximum move of 9 points. The 4 contract trade was exited at plus 3 points for 2 contracts and plus 6 points for 1 contract. Both were on limit orders. The final contract was exited with a stop order for a 5.25 point profit.

Noteworthy points on this trade were the entry after the failed test of the high of the day and the several stop adjustments that were made. The “day trade the markets” software was used for trade entry location and for the trade management utilizing an auction-based market logic and the recurring box formation.

Net result on the trade was a 17.25 point profit for the 4 contracts.

Live Day Trading emini Nasdaq 7-19-2017

The emini Nasdaq has been in a strong up auction all month. There was a small gap open higher today that consolidated into a box formation in the early going. This set up a likely move higher after the market failed to make new lows for the day on three attempts. A long trade was entered in two phases. The first as it was first starting to break higher and the second once it had.

The first half of the position, 4 contracts, was exited for a 10 point profit. The second half of the position was exited with a stop order for a 5.50 points profit. Net result ton the trade was 62 points ($1240) for the 8 contracts.

Live Day Trading Gold – Early Overnight Session 7-7-2017

The gold market had a swift and surprising sell-off in the overnight market at approx 7 pm et. Trading in the direction of the swing auction two short orders were placed. Only one was filled as the market came to within 2 ticks of the higher short entry order. The sell-off after the entry took the market down to where we expected (near the low of the session). The first contract was filled at a plus 15 tick profit. The second contract was stopped out for an 8 tick profit. The net result was a 23 tick profit ($230).

Live Day Trading Euro Currency 1-24-2017

This is a video of a live day trade taken in the Euro Currency futures market on Tuesday 1-24-2017.  We don’t usually trade the euro currency but today offered an exceptionally good opportunity. There was continuation higher in the early regular trading hours. That rally took the market very near the highs of the very heavy sell-off from the 8th of December. Once the market had rejected two waves of early buying today the short trade was entered.
The first 2 of the 4 contracts traded were exited with a limit order for a 10 tick profit per contract. The third contract was also exited with a limit order for a 20 tick profit. The final contract was exited with a stop order for a 15.5 tick profit.

Net result on the trade was 55.5 ticks, equal to $693.75. I was fortunate on this trade in that the market sold off almost immediately being filled. This trade was an excellent example of how using the interday auction can be combined with the intraday analysis using the day trade the markets software.

Live Day Trading Crude Oil 5-10-2017

The weekly inventory news was released today after the crude oil market opened with a gap higher. For the first 90-minutes, the market was very quiet. The reaction to the news sent the market rallying as it moved through the recent selling gap. Once it held above there and had another leg higher a long trade was set up. The entry was placed using the “day trade the markets” software with excellent trade location. The market moved only a few ticks below the long entry before rallying.

The trade was exited with a limit order for a 20 tick profit for the first half of the position. The second half was exited with a stop order for a 17 tick profit.