Trading Crude Light retracement from the forty-five minute chart resulted in a fifty-one tick profit target being achieved using a combination of the ADX strategy to identify the retracement on the higher timeframe with the ATR strategy on the lower timeframe for entry.

Trading Crude Light Retracement Entry Criteria

On the forty-five minute chart, the TradersHelpDesk ADX indicator revealed a magenta peak.  This indicated that the forty-five minute chart would push price down to the Average True Range Stop (ATR).

To confirm this movement, we zero down to the three minute chart.  The three minute chart needs to flip the ATR stop (plus sign) from blue to red.  It does.  Then price must retrace and test the ATR stop to confirm that a resistance area has been formed.  That occurred and an entry was generated at 43.13.  The exit was generated at 42.62 or 51 ticks of profit per contract.

trading crude light retracementAdditionally, on the Dow Jones we had another two entries going into the 45 minute trend (which had already turned to blue and heading up to the Congestion Dot).  In this case, the forty-five minute chart was indicating that the market would move up as the ADX indicator was not showing any signs of being overbought or oversold.  In this example, only long positions going into the higher timeframe trend would be allowed.  Again, just like with a retracement trade, the entries are at the Average True Range stop (plus sign on the chart).

Trading Dow JonesThe two entries on the Dow were:

  • Long at 17758 with an exit generated at 17788 for thirty points of profit per contract.
  • Long at 17800 after a retracement back to the ATR stop loss indicator, at 17800.  The exit on the second trade was at 17828 for twenty eight points of profit per contract.