Day Trading Blog: Trading Plan: Double Bottom or Top before NFP News

Saturday, October 2, 2010

Trading Plan: Double Bottom or Top before NFP News

Next friday is the job report, so looking at last 3 times the market really set a double top or bottom before the trend after the news goes on, so best case was like on the 6th August the DAX already made a top in the morning and then continued to sell off, all other days you had to till after the release or had to have your stop at the low of the day to stay in the long trend.

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Trading Rules:

how to trade profitable? with KSE. knowledge, strategy, execution.
Knowledge: You need to buy low and sell high. So I wait for the price to first go to a prior support level on the daily, 4h, 1h chart.
Strategy: Timing is important so I trade when there is a good setup on the dax, s+p, nasdaq or oil market. My goal is to make few trades with high risk reward, that is archived by either holding a trade till the market closes or reaching a level that sets up a counter trade.
Execution: Usually there is only a 20 point risk involved, so I try to get into a prior support level on the 10 min chart and automatically set a stop and multiple take profit targets.
All the little details how to trade better are listed here but I like to keep it simple: just enter the market at prices with a target that it at least 3 times the initial risk.

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