Trading Crude Light for 31 ticks of profit per contract off a retracement on the 45 minute chart.
Trading Crude Light Rules for Entry
Setup was as follow:
- ADX indicator on the 45 minute was greater than 70 indicating an oversold market
- Price was approaching the line in the sand indicating a retracement to the Trend ATR (plus sign on the 45 minute chart)
- 3 Minute flipped the ATR to blue (opposite color of the 45 minute chart, which was red)
- Price went back and retested the ATR (plus sign on chart) on diverging volume using the Directional Volume indicator
As listed above, the trade entry criteria was filled and an entry was generated at 41.54. The ADX magenta peak indicated a retracement to the ATR stop on the 45 minute chart which was at 41.86. Although price actually made a wide bar and flipped the ATR on the 45 minute chart, the exit using the strategy was 41.85 (one tick from the ATR on the 45 minute chart). The trade made 31 ticks of profit per contract while only risking 15 ticks on entry. (Click on chart to expand)
The combination of the TradersHelpDesk ADX and Trend ATR indicators give futures, forex, and commodities a clear advantage when daytrading these markets because we can identify when they are overbought, oversold, or trending. If overbought or oversold, we can also identify where price will likely go next, giving us a leading edge in the markets. Plus, now with the ADX and Trend ATR strategies that will be available for lease soon, traders can setup email alerts so they don’t have to sit by their computers all day. Instead, the strategies can send alerts to their smart phones so they know to go and check the markets for these upcoming moves. Trading has been simplified because you are either trend trading or counter-trend trading (overbought or oversold conditions are met).