futures

I am posting this to illustrate that even though I have sold out of my swing positions in equities for my trading account I am still active in the market. I have no swing trades currently due to the overbought nature of the market. I expect a pull back and will not be buying any stocks on break outs. I buy pullbacks and we have not seen one in a long time.

However, there is always stuff to do in the market and I am trading commodity futures and the US dollar. Here is a screenshot of my last 24 hour swing trade in the dollar. The thinkorSwim ticker symbol is /DX.

I entered the trade yesterday overnight after a large drop in the price on Tuesday. Why did I take the trade? There looked to be a short-term bottoming pattern in the dollar. There is also a gap that formed on Sunday/Monday and I believe it will need to be filled between 80.80 -> 81.00.  So essentially I liked the risk reward so I purchased 2 contracts over the last couple trading sessions. (The green circles shows where I purchased the contracts).

Below is a play by play rundown of a typical dollar futures trade. You should be able to click on each screenshot to see the progression of the trade along with any notes written on the chart as the trade was taking place.

1.) Before I place a trade (no matter the trading vehicle) I already know where the support and resistance levels are. This is a short term trade (scalp) but you can essentially do the same thing for a longer term swing trade or investment.

This first chart shows that I bought the dollar on a huge pull back.  I placed the trade on a support line I had mapped out days in advanced. I did not know if the price would ever reach this level, but I map these channels and levels anyway. Then I wait patiently and if  the price hits a support line I buy or sell it looking for a bounce.