Corn futures had a breakout setup for today. It had an inside day yesterday, it was a doji and it had the narrowest trading range of the previous four sessions. This means I anticipated a breakout move today. We expect that a move above yesterday’s high or below yesterday’s low would see follow through, so we’d look to enter a trade if either was taken out.
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Grain futures can be good and/or bad vehicles for breakout trading. They can be bad in that breakout moves often occur in the night session, and as I generally watch the markets too closely at night I don’t often enter new trades during the night session.
However, on the good side having two distinct trading sessions per day gives you a second chance at a breakout trade for the day session; you just may have to look for other entry points.
Today’s intraday chart for July Corn futures is below. Monday’s low at 777-2 was taken out early last night, if you didn’t get in then it didn’t give you another chance to sell it there. Corn opened over the overnight low of 768-2 and promptly dropped like a rock, reaching its limit down price of 752-4 about 45 minutes after the open.
Traders who trade other futures markets might consider looking at the grain markets. You need to understand its characteristics (daily limits, know when reports are being released, etc.) but for financial markets traders the grains may give you additional trading vehicles later into the morning after the first rush from the financial markets has slowed.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
