Four Legs Down Trading Strategy | Crude Oil, Emini, Nasdaq, Gold, Euro

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Markets took a tumble this afternoon after some alarming news from the White House, which gives the bears firm control of our favorite markets…

But look closely, and you can see that we’re FOUR legs down on the chart, which tells me to anticipate one very important chart pattern on Wednesday – are you ready?

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Crude Oil is bearish and trading with four legs down this evening, which tells me the bears have control, but it’s far too low to start selling at such a low price…

Knowing this, my plan is to wait and sell off key resistance levels waiting overhead, and I have my eyes on the combination of a Hidden Channel and a reversal-line for Wednesday morning…

E-Mini S&P is bearish with four legs down into a narrow trading-range, which tells us the bears have control, but I hate the idea of selling into the low of this range…

A better strategy will be selling up above the high of the range using a buyer-failure set-up with a target back at range lows tomorrow morning.

Nasdaq is bearish with a Spike & Range pattern, telling me to look for sell set-ups using buyer-failures up above the high of the range.

But I’m also watching for a possible reversal, since this big move down came in the wake of news headlines this afternoon, but I need to see the 123-Reversal before I consider buying this market on Wednesday.

Gold is bullish and trying to re-test the high from earlier this afternoon, but it appears they’re struggling to get the job done, which tells me to look for a trading-range and buy underneath the low using a seller-failure pattern…

And don’t forget that small range where the day began – because if these buyers can’t hold this, we’re looking like an easy collapse back down to 1530 tomorrow morning.

Euro is bullish and rotating back and forth inside a wide channel this evening, telling me to look for buy set-ups at the low and underneath the channel lows tomorrow morning.

And I’m also keeping my eyes open for a bull breakout of this channel, watching for a 2-Try Breakout Pattern for an aggressive rally up to the range waiting overhead.
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Economic News:
Please remember that economic news, both scheduled and un-scheduled will increase volatility and decrease liquidity in the market in the short-term, which causes price-action to react inconsistently with the levels of support and resistance mentioned in this video. Trading during economic news reports is dangerous and highly discouraged, no matter what your level of experience.
PLEASE DO NOT TRADE DURING TIMES OF MAJOR ECONOMIC NEWS
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Joseph James, SchoolOfTrade.com and United Business Servicing, Inc. are not registered investment or trading advisers. The services and content provided by SchoolOfTrade.com and United Business Servicing, Inc. are for educational purposes only, and should not be considered investment advice in any way. U.S. Government Required Disclaimer – Commodity Futures Trading Commission. Futures and Options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. cftc 4.41 These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have under-or-over-compensated for the impact, if any, of certain market factors, such as liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to these being shown.

Comments

AirmanJH says:

Thanks Joseph. I've just started trading futures with a focus on CL for now. Very helpful information. I would like to know how you handle risk of a major event during your trades. Do you set hard stops or try to manually react to technical breakdowns?

Manuel Rodrigues says:

Hi Joseph, been watching your interesting videos for a while now. Got a question though. Let's take for example the nested pattern at a buy zone – If this pattern begins to form during the European trading hours but is finally formed as the US market opens, would you still be inclined to take the trade? I guess what I'm getting at is, sometime I see these patterns occurring partly in the European market and the rest within the US market. Is it still valid to trade it? Cheers

Mahmood Ali says:

Hi there
how do you differentiate between a zigzag retracement and the 2 try failure pattern?

Ju Wop says:

WHERES YOUR LIVE TRADE ROOM?

Joseph James says:

Markets that go four legs in one direction certainly have strong trends, but they are too high to buy or too low to sell, and we usually end up going sideways the following day, which makes the strategy for Wednesday morning relatively simple – are you ready?

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