What A World of Difference A Day Makes

What A World of Difference A Day Makes!!

Plus 98 ticks trading one contract in the crude oil futures market today …

Let’s talk about trading today … as the trading day opened up I was wondering what the day would have in store for me after my pitiful performance yesterday giving back my trading gains and getting within a tick of losing the combine due to poor judgment on the max daily loss.

What I saw early in the trading day was a trading range and some trading congestion demonstrated by the pretty equal volume bars: BBV and RBV. This is what I call my TieBreaker scenario that stops any entry until I see some proof of direction. The TieBreaker is one of my Futures Day Trading Tips Series. These are my favorite (all-time) trading setups.

By the way, there are 10 of them!

Chart 1: Crude Oil Futures Day Trading

Chart 2: Crude Oil Futures Day Trading

The trading day opens up with the open outcry of the Crude Oil Futures Market and a quick selloff right at the 8:05AM CST mark. In the past, I would have taken this trading signal, and it would have more times than not created my opening trading loss. But this is where the TieBreaker come in … it keeps me out of a market that is not quite ready to take off one way or the other.

Chart 3: Crude Oil Futures Day Trading

Here is what I saw a few minutes after 8:05AM CST. We had a bottoming pattern forming and the RBVs were outnumbering the BBVs by 2 to 1. This was telling me that buyers were coming into the market to support it at that level. So all I needed was a decent place to find an entry point.

Trading Sheet: My Trading Sheet that Keeps me Sane … and more times than not keeps me out of trouble … but it is only as good as the operator!

Chart 4: Crude Oil Futures Day Trading

So I found a buying entry point this morning at 4141 at 8:20AM CST ...

Chart 5: Crude Oil Futures Day Trading

Finally started seeing some sell stops gunned and runned (another one of my Futures Day Trading Tips Series) ... Trend was to go Long and was confirmed off this BBV.

Chart 6: Crude Oil Futures Day Trading

This chart has one word on it Capitulation in the market .... and it is being represented by all the sell stops in volume being gunned and runned. I was already in a long position so this is simply a warning signal to let me know I should start looking for a Profit Target on the trade. My original profit target on the trade was a 6P profit target of 4287 today.

Here is where the Blue SMA trailing behind the trade is utilized against the nearest profit target reached, then to determine how far behind I want to trail the profit stop to the crude oil futures market to give it a little room to operate.

Chart 7: Crude Oil Futures Day Trading

We reached R1 on the trade at 4242 on the chart below. And I was looking for either 4287 or 4305 as my top profit target of the trading session move. I eventually moved my profit stop to 4227 off this trading chart.

Chart 8: Crude Oil Futures Day Trading

I didn't quite make my profit target, but I was happy to take away 98 ticks on the crude oil trade today. This was a win of $980 on one trade. It was nice to see the crude oil market make it to my original profit target today ... I would have most likely been stopped out at 4262 if I was able to remain in the trade as it retraced all the way back down to R1 one more time.


Good Trading,

David M. Knight

P.S. Check Out My: Futures Day Trading Tips Series




About The Author

David M. Knight

I am a 30 Year Futures and Commodities Trading Veteran. In addition, I enjoy games of skill and chance like: poker, craps, blackjack and roulette. During my professional career, I have developed and implemented successful trading strategies and methods; along with winning systems in games of skill and chance. Join with me on our mutual journey together.