A MIND MUSCLES FOR TRADERS COURSE
Trading Strategy Insights #2
Using the same technique for 2 very good trades in Crude Oil and E-mini S&P 500
Trade #1: Crude Oil Futures Trade on August 29, 2019 (24 Ticks)
Initial Analysis (CL Trade)
- Step 1: I look in the Daily and Hourly chart and notice CL is in a broad range for a while
- Step 2: I look in my intraday line chart and notice the market mood hasn't changed since the
- beginning of the overnight session (slow market trending up)
- Step 3: I also notice there is a consistent intraday uptrend, with higher highs and higher lows
- Step 4: I see price retracing and finding support in the daily VWAP
- Step 5: I enter the trade when I validate that price is moving back up
As you can see, I have enough confluence factors to confirm this is a high probability trade with good payoff.
Entry, target and stop
- Step 6: I enter the trade at 56.20, 10 ticks above VWAP, after validating the up move is strong by looking at price action and order flow (not in this chart)
- Step 7: I place a sell limit order as my target at 56.44, which is the last swing high
- Step 8: I place my stop loss at 56.08, right below the VWAP
- Step 9: Cumulative delta moving up confirms my open position
- Step 10: Price crossing up the moving averages is another confirmation
- Step 11: I decide to keep my original target at 56.44
There are different confluence factors giving me confidence to maintain my original plan and keep my target unchanged.
- Step 12: A total of 25 minutes into the trade. Yes, trade location requires patience and confidence to let the trade run
- Step 13: A gain of 24 ticks, which is a "small" target for Crude Oil, but still a good result, considering the low risk of the trade
Trade #2: E-mini S&P Futures Trade on August 29, 2019 (37 Ticks)
This is a trade that is very similar to the CL trade explained in detail above. The key factor to enter the trade is also price retracing back to the daily VWAP and going back to the intraday up trend.
Here are some highlights
- Step 14: I look in my intraday line chart and notice the market mood hasn't changed since the beginning of the overnight session (slow market trending up)
- Step 15: I see price retracing and finding support in the daily VWAP
- Step 16: I enter the trade when I validate that price is moving back up with order flow behind the move
- Step 17: I place my target right below the thicker liquidity at 2920, so I have a higher probability that my order gets filled.
- Step 18: Not in the chart. Stick to the plan and let the trade run. Looks easy now, but I had to wait for a while for this trade to reach my target
- Step 19: A total of 36 minutes into the trade. Another trade that required patience and confidence to let it run
- Step 20: A gain of 37 ticks, not bad at all for a relatively slow day in the S&P
I'm a strong believer that confidence in our strategy is a key to success in trading. And this is one of the skills we help traders develop at the Mind Muscles Academy. I hope you learned something useful for your trading in this lesson. If you have any questions, please post them here or send me a message using the form below.
Please use the form below to get free access to the rest of the story: videos, PDFs, cheatsheets and more.
Did you miss the rest of the Trading Strategy Insights series?
- Trading Strategy Insights 1: E-mini S&P Futures Trade on August 22, 2019 (44 Ticks).
- Trading Strategy Insights 2: Case study - using the same technique for 2 trades in crude oil and e-mini S&P 500.
- Trading Strategy Insights 3: Case study - using fundamental analysis to gain an extra edge in a crude oil futures trade - 91 ticks
- Trading Strategy Insights 4: Case study - using order flow analysis to gain an extra edge trading futures
- Trading Strategy Insights 5: Case study - using order flow analysis to spot a market change in real time
- Trading Strategy Insights 6: How to spot a reversal in a volatile market.
- Trading Strategy Insights 7: How to use market structure data to plan a high probability trade.
- Trading Strategy Insights 8: How to use price action to enter a high probability trade.
Required Disclaimer - Commodity Futures Trading Commission: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
2020 Mind Muscles For Traders. All rights Reserved