Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Reaction Crude Oil Swing Trade

Figure # 6.2 - The bearish Reaction swing formed between January 25 (C) and January 30 (D) in the March 2006 Crude oil. The sell signal was triggered on February 1, but the futures market did not trade below the pivot low of 65.45- (C) - until the following day.

  1. Day one – February 2 - The Breakout Bar - Crude oil opened slightly lower and dropped through the 65.45 pivot support and finally closed at 64.68. The close was below the swing pivot low at (C).

  2. Day two – The futures market pushed to a new low of 63.95 before closing at 65.37.

  3. Day three – The futures market opened higher and tested the 20-day SMA at 66.20, but still remained below the high of the Breakout Bar.

  4. Day four – The futures market gapped lower and began trading at 64.20 before it closed sharply lower. The downward trend was entrenched and continued lower into the projected swing trade date.

crude oil
Figure # 6.2 – March 2006 Crude oil

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**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED 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.

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