A Simple But Potentially Highly Profitable Approach For Trading Commodity Futures
The best time to trade using a good
I have been using this methodology to trade the commodity markets successfully for some time now. This unique trading method is simple and easy, but with nice profit potential.
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It involves buying higher swing-lows and selling lower swing-highs. Also known as pivot-points.
A definition of these swing-highs and swing-lows is appropriate here: A swing-high is a high bar with lower bars on both sides of it. A swing-low is a low bar with higher bars on both sides of it. The more lower bars to the left of a swing-high the better. The more higher bars to the left of the swing-low the better. That makes them more significant and presumably more powerful swing points. However, only one bar on either side is acceptable (but two or more to the left are usually stronger signals).
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My trading methodology requires two (or more) consecutive swings, with the second one being a higher swing-low than the preceding one for a buy. Alternately, the second swing-high must be a lower swing-high than the preceding one for a sell.
The actual long trade entry takes place on a buy-stop two ticks above the high price of the last bar (the bar following the swing-low pivot bar), for a buy. The short trade takes place on a sell-stop at two-ticks under the low price of the last bar (the bar following the swing-high pivot bar), for a sell.
Your stop-loss order is placed 6-ticks under the lowest price of the last swing-low bar on a long trade. The short trade stop goes 6-ticks above the highest price of the last swing-high bar.
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You can make some really outstanding money using this simple, but very effective trading methodology.