Warrior Trading Blog

This Green Getting Old? +$1,360 | Steve’s Futures Pulse 161


Boy oh boy, these green days are getting old. Nah, who we kidding? We love our green days, and we had another one here today. Thanks to light sweet crude. We identified a breakdown trade and captured 1360 in just a handful of minutes. Watch today’s Futures Pulse, so you can see the chart pattern I saw and learn from today’s trading opportunity. Come on!

All right we’re in business here. I’ve got my Warrior Trading Inner Circle T-shirt from Orlando on, so I’m in the warrior trading state of mind. But when am I not? Let’s be honest. Happy Thursday to those of you joining and logging in. Early birds get the worm again today. We found a nice breakdown trade in the crude oil market. I’m going to highlight it here on the chart for those of you that may be just logging in. We took a short position here on the breakdown below this POC Zone. That’s the aqua color line, because that’ll often serve as a real nice resistance point on an entry.

But the real precursor to the trade here that really was the catalyst to my getting short was we saw the market start to get exhausted here. We saw the navigator indicator go into that overbought zone which is anything above plus four. So if you look over here, we got over plus 50. Put us in a bear state of mind. So we took this short position, 5297 which is right about where I’m drawing that line right there. We usually work a wide stop, but I want to talk a little bit about this, because it seems like there’s some confusion, especially for those that maybe don’t come into the room live, while I’m trading live and if you’re just watching recast, you go, “Oh gosh, that’s a lot of risk.” Well, it’s really not.

There’s a few different ways you can manage risk. I put the stop up here 5351. Initially again, it’s just a very quick, I like to call it apocalypse prevention plan, meaning if the absolute worst thing happens and I’m totally wrong, I don’t have a chance to move the stop or trail it down, then guess what, I’m going to get stopped out, I’m not going to like it, but I’m going to get stopped out.

Ways you can manage risk remember, trade smaller lot sizing, okay, minimum units, you can trade just a single unit. You can also pick a different level, okay. So on this short side trade which I’m going to show you how we made some money here in just a moment. You can see at the top of my screen, that’s how we fared, we did just get stopped out moments ago. 1360 you’ll see is what we realized on this particular trade up here. But you can pick different places in terms of stops amongst the levels. That’s the beauty of the structure of TAS Market Profile is we get the entry here. I’m going to zoom in real nice and big here on this okay.

So we entered earlier on this bar right here at 5297. I worked a nice wide stop up here, but you could pick a different level like this one, or you could pick a different level above the POC, that aqua color line. Market came down, down, down, down. We did get the break down below the demands on that we’re looking for and really not surprised to see the market pull back off this master point of control or what we call MPOC, master point of control. You see how there’s this yellow line that sits on the market map indicator. What that yellow line tells us is that is the highest volume traded price. That’s super valuable information for us in the markets because markets will often times get support when the market comes down from above there and of course if that line was up above, that’d be real nice resistance point.

Long story short, let me get you caught up on this trade, because it was a nice little trade again. I’m going to show you we end up pulling 1360 out of this trade in, I don’t know, it was 15 minutes or something like that. And here’s basically how it happened. So 5297, I worked an initial stop rate here, market came down, we covered five of my six units at 73. That’s 5273 and that closed out $1200 basically at that time in terms of profit. Kept that runner in play and I took that stock from right here and pulled it all the way down to 5281 and that’s what added that extra $160.

So what basically happened in this trade took a well timed entry, we got the move we were looking for. We saw all this congestion down here in advance, so I knew I was going to be aggressive on profit taking on the breakdown below there, because there’s no guarantee that it breaks through and that’s why I took five of six units off but still kept that one final unit in play because guess what, I wanted to have some skin in the game should the market have broken lower. That’s why instead of just jumping out of all six units, I trailed the stock and locked in worst case, $160 profit alleviated all of the risk and my worst case scenario was I get to you know, cash in an extra 160 bucks but most importantly, I was in a position. I gave the market a chance as I like to say, to give me that home run to the down side.

Wasn’t meant to be so I just logged another single, 1360, I’m done for the day in crude. Remember Chad of course is going to continue looking for opportunities today. I’m going to be right here with you and seeing if we can’t find a couple more as we go. But hey, not a bad way to start a Thursday, right? Happy Thursday, green. Four green days, four days of trading this week. Hopefully we’re going to finish strong tomorrow and I got a pretty good feeling we will. Have a great day.

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