The trading is good right now so I’m posting a few charts here that show the kinds of setups I look for in both intra-day and position trading. I didn’t take the wider “long-term” trades in RIG or TF, but did trade the consequence of the TF trade. I also took a few more trades as the TF gave the opportunities.
I continue to maintain my view that TF CL and 6E are the best contracts for trading right now.
TF trades, intra-day, tick chart (300)
I took some great trades here. By the time I started trading on Tuesday, the markets had sold hard and were bouncing on decreasing volume. This formation is bearish continuation and as this short term trend lost momentum and broke (1), price formed a bearish reversal formation (2) before confirming by breaking the neckline.
It was here I logged in, and a few minutes later, a pennant continuation formation formed. This provided a high probability trade which I took short with 2 contracts. I covered one at 713 and held the second through the first bounce, covering at the ST double bottom at 712.50 again.
I shorted a little after point 4 again, also with 2 contracts. I held one down for +3 at 712.50 again. When it breached, I added another and held 2 for a drawdown on the bounce, covering for -2.50 and +2.
I took 3 pts on 2 contracts at point 5. Trade 6 offered a simple R retest, while 7 was a great chance to accumulate for 1.50 points of risk as the price bounced off a triple bottom.
Euro trades, intra-day, tick chart (300)
Went long 6E on the inverse head and shoulders reversal and subsequent neckline retest. Long 2 on first retest, closing one at short term resistance before adding a second on the second retest. Didn’t extract as much value as I could have here, closing early at 1.3700 & 1.3704.
Russell daily, neckline retest
Traded the continuation of this trade on an intra-day basis. This is a perfect swing setup and one which I used to trade all the time when using the dailies. This double topped last week on an intra-day basis which added to the probability here. There was almost no risk in this trade ($150 per contract) compared with potentially 140 points to the downside ($14,000 per contract).
Trading the first time retest of such a clear-cut support or resistance area offers high probability of rejection, low risk and the opportunity to reduce risk immediately as it moves away from this level.
RIG swing trade, established range, daily.
Another I didn’t take, but a stock which I watch quite closely. Lots of nice levels on this chart, and it’s these kinds of charts that you should look to trade. Established lateral levels give you a chance to mitigate risk as well as plan realistic exit strategies.
RIG rejected 60 again this week and now lies in a short term trading range of 55 and 60. A breach/break of these levels will again offer another trade.
