HOW TO TRADE BCO/WTI INTRADAY(VERY EASY) ?Jut keep it simple
Updated
his is one of the simplest trending strategies I use for day trading, and also one of the most effective. For this, it has been given the catchy name: Day Trade Trending Strategy. Using a one-minute chart the price will often make a larger move, have a very simple pullback, and then begin to move in the trending direction again. The strategy attempts to capitalize on that. Pullbacks aren’t always this simple, therefore, this strategy is best used in conjunction with the consolidation breakout method and the engulfing candle method (which this method is similar to).
The strategy utilizes the trend to make a profit and also keeps me out of the market when the market isn’t trending.
Before I begin, I cannot stress enough the importance of patience when employing the strategy. After you’ve exhibited patience, I am cannot stress enough the importance of restraint in not continuing to use the strategy once the window has closed. Like a fighter honing his striking skills, a strike is only effective if delivered at the exactly the right time. Too early, or too late, and the strike is not as effective. Wait for opportunities, then pounce…that’s how to trade the financial markets.
Day Trade Trending Strategy – When and How
The following day trading strategy provides roughly 4 to 8 trades per day, sometimes a bit more and sometimes a bit less. The main waves (trends) of the day are traded, usually with two trades per major price wave. Even if not taking trades using this method, it provides an overall context for the movements throughout the day, giving feedback and confirmation for many other strategies or signals which may arise.
When day trading stocks or forex I use a 1-minute chart and a Level II (not required for forex). The Level II is only used if the volume in a stock is bit low and I need to watch for when liquidity is available. If the stock has lots of volume (plenty of shares at every price level) then there is no need for a Level II, just use the chart.
Some days will turn out to be ranging days. If this case, no trades will be triggered, or very few, since intraday swing highs/lows will not be broken, thus no trend is present. Use patience and restraint. Only trade what the market actually provides. One of the most common problems new traders have is taking a trade too early and trying to get a better a price, assuming a trade will trigger in the near future. This is a big mistake. Only take a trade once the actual trade trigger (discussed a bit later) actually occurs. As alluded to prior, another mistake is waiting too long after a trade trigger has occurred. This too is detrimental to profits. Trades are taken at the exact moment of the trade trigger or not at all.
Don’t start using this strategy until about 30 minutes into the trading day. I have other strategies I use during the first half hour, such as the Truncated Price Swing Strategy.
We can now draw our downward trendline because we have broken lows and eventually we want to go short.
We then wait for a pullback towards the trendline
Please note, the trendline is only a visual and really has no significance to me. What matters, in this case, is that all the future swing highs in this move stay below the most recent swing high and new lows are created. As long as that happens, it is a downtrend. The opposite applies to an uptrend.
Enter short when the pullback is potentially ending, signaled by the price dropping back below the low of a green bar or cluster of bars near the trendline (doesn’t need to be exactly at trendline).
Day Trading Trending Strategy NOTES:
I am only taking trades in the trending direction. I am waiting for a pullback and then only entering once the price starts moving in the trending direction again. This takes skills, as it is a somewhat subjective form of analysis and trading.
The exact level of the trendline, if used, is not important. It is just a visual aid. Rather, understand that pullbacks in a downtrend can go almost all the way to the recent swing high in that downtrend, but should not exceed it (opposite for uptrend). As a pullback is occurring I am looking for any sort of shift which indicates a move back in the direction of the current primary trend.
If there is any question as to the current trend, I do not trade this strategy.
SPY is used for these trade examples, but the method can be applied to any stock or forex pair. Other stocks to consider for day trading each week are discussed on the Day Trading Stock Picks page.
If the market is pretty close to my profit target and starts to pull away from the target, I exit. I am not going to risk giving up a bunch of profit for a couple cents.
The target, which can be estimated before the trade occurs, needs to be realistically achievable based on the size of the recent price waves. If it the target will require the price have a much bigger move than it has been producing that day, the trade is skipped.
The strategy utilizes the trend to make a profit and also keeps me out of the market when the market isn’t trending.
Before I begin, I cannot stress enough the importance of patience when employing the strategy. After you’ve exhibited patience, I am cannot stress enough the importance of restraint in not continuing to use the strategy once the window has closed. Like a fighter honing his striking skills, a strike is only effective if delivered at the exactly the right time. Too early, or too late, and the strike is not as effective. Wait for opportunities, then pounce…that’s how to trade the financial markets.
Day Trade Trending Strategy – When and How
The following day trading strategy provides roughly 4 to 8 trades per day, sometimes a bit more and sometimes a bit less. The main waves (trends) of the day are traded, usually with two trades per major price wave. Even if not taking trades using this method, it provides an overall context for the movements throughout the day, giving feedback and confirmation for many other strategies or signals which may arise.
When day trading stocks or forex I use a 1-minute chart and a Level II (not required for forex). The Level II is only used if the volume in a stock is bit low and I need to watch for when liquidity is available. If the stock has lots of volume (plenty of shares at every price level) then there is no need for a Level II, just use the chart.
Some days will turn out to be ranging days. If this case, no trades will be triggered, or very few, since intraday swing highs/lows will not be broken, thus no trend is present. Use patience and restraint. Only trade what the market actually provides. One of the most common problems new traders have is taking a trade too early and trying to get a better a price, assuming a trade will trigger in the near future. This is a big mistake. Only take a trade once the actual trade trigger (discussed a bit later) actually occurs. As alluded to prior, another mistake is waiting too long after a trade trigger has occurred. This too is detrimental to profits. Trades are taken at the exact moment of the trade trigger or not at all.
Don’t start using this strategy until about 30 minutes into the trading day. I have other strategies I use during the first half hour, such as the Truncated Price Swing Strategy.
We can now draw our downward trendline because we have broken lows and eventually we want to go short.
We then wait for a pullback towards the trendline
Please note, the trendline is only a visual and really has no significance to me. What matters, in this case, is that all the future swing highs in this move stay below the most recent swing high and new lows are created. As long as that happens, it is a downtrend. The opposite applies to an uptrend.
Enter short when the pullback is potentially ending, signaled by the price dropping back below the low of a green bar or cluster of bars near the trendline (doesn’t need to be exactly at trendline).
Day Trading Trending Strategy NOTES:
I am only taking trades in the trending direction. I am waiting for a pullback and then only entering once the price starts moving in the trending direction again. This takes skills, as it is a somewhat subjective form of analysis and trading.
The exact level of the trendline, if used, is not important. It is just a visual aid. Rather, understand that pullbacks in a downtrend can go almost all the way to the recent swing high in that downtrend, but should not exceed it (opposite for uptrend). As a pullback is occurring I am looking for any sort of shift which indicates a move back in the direction of the current primary trend.
If there is any question as to the current trend, I do not trade this strategy.
SPY is used for these trade examples, but the method can be applied to any stock or forex pair. Other stocks to consider for day trading each week are discussed on the Day Trading Stock Picks page.
If the market is pretty close to my profit target and starts to pull away from the target, I exit. I am not going to risk giving up a bunch of profit for a couple cents.
The target, which can be estimated before the trade occurs, needs to be realistically achievable based on the size of the recent price waves. If it the target will require the price have a much bigger move than it has been producing that day, the trade is skipped.
Note
Week Ahead: US CPI Report May Rock These 3 MarketsEven as anticipation mounts ahead of the US jobs data due later today, investors may be bracing for more volatility in the week ahead thanks to another round of risk events.
Economic Calendar for Next Week
All eyes will be on the incoming US inflation data as well as speeches from financial heavyweights and other risk events which could spark some fresh action across markets.
Monday, May 8
UK bank holiday honouring Charles III coronation
EUR: Germany industrial production, ECB Chief Economist Philip Lane speech
Tuesday, May 9
CHN: China trade, money supply
AUD: Australia consumer confidence
EUR: ECB Chief Economic Philip Lane speech (IMF)
USD: Fed New York President John Williams speech
US President Joe Biden debt ceiling talks
Wednesday, May 10
EUR: Germany April CPI (final)
USD: US April CPI
Thursday, May 11
CNH: China PPI, CPI
GBP: UK BOE rate decision & press conference
USD: US PPI, initial jobless claims
G7 finance ministers meet in Japan
Friday, May 12
GBP: UK Industrial production, Bank of England Chief Economist Huw Pill speech
USD: University of Michigan consumer sentiment, Fed speeches
The April US consumer price index (CPI) report published on Wednesday 10th May will be exactly one week after the Federal Reserve raised rates and signalled a pause in further increases.
Given how Fed Chair Jerome Powell has left the door open to further tightening if incoming economic data warrants, this could add more spice to the report.
CPI Forecasts
Markets are forecasting:
CPI year-on-year (April 2023 vs. April 2022) to remain steady at 5.0%.
Core CPI year-on-year to cool 5.4% from the 5.6% in the prior month.
CPI month-on-month (April 2023 vs March 2023) to rise 0.4% from 0.1% in the prior month.
Core CPI month-on-month to cool 0.3% from the 0.4% in the prior month.
Ultimately, further evidence of inflation slowing down could reinforce expectations around the Federal Reserve pausing and eventually cutting interest rates. Should inflation remain sticky, this could rekindle bets around the Fed leaving interest rates higher for longer.
Expectations are rising over the Federal Reserve cutting interest rates with the chance of a 25-basis point cut in July currently priced at 53%, according to Fed funds futures! It will be interesting to see how the incoming inflation data shapes market expectations around the central bank’s next move.
How Might the Markets React to the CPI Report?
With all of the above discussed, here’s how these 3 assets could react to the US CPI report
USD Index
The past few months have been rough and rocky for the dollar as investors weighed the prospects of the Federal Reserve pausing and then eventually cutting interest rates. More pain could be in store for the dollar if US inflation cools more than expected in April.
A soft inflation print may drag the USD Index toward the 100.72 level. Should prices experience a bearish breakout, this could open the doors toward 100.
A sticky inflation print could throw a lifeline to dollar bulls, propelling back above 101.50 with 102.34 acting as a key level of interest.
SPX500_m
After being trapped within a range for the past few weeks, could a breakout be on the horizon for the SPX500_m?
If the inflation numbers beat expectations, this may trigger a bearish breakout on the SPX500_m – taking prices below the 4050-support level.
Should the inflation numbers come in lower than market forecasts, SPX500_m bulls could be injected with renewed confidence as expectations intensify over the Fed ending its rate cycle. This could send the index back toward the 4180 resistance level and beyond.
Gold
It may be wise to fasten your seatbelts for potential volatility on gold due to its high sensitivity to inflation data and US interest rate expectations. The precious metal remains bullish on the daily charts despite prices pulling back from near-record highs.
A soft inflation report could sweeten appetite for the zero-yielding asset as bets rise over the Fed cutting rates in 2023. This development could push the metal back towards the 2023 high of $2063 with bulls eyeing $2070 and the all-time high at $2075.
A stronger-than-expected inflation number could drag gold prices back toward the psychological $2000 level.
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