Market Watch - Wheat Long
After doing a full scan of the Forex market, we hate to say it but there's not really much taking our fancy. It’s time like these when it’s a great advantage for any trader to have the ability to trade other markets other than Forex, such as Futures.
One Futures contract that caught our eye today has been Wheat! Wheat has been moving higher since the start of October which is actually against its longer term trend if you take a look at Wheat on the Monthly chart. However right now it's moving higher so it's worth drilling down timeframes to see if there's any potential opportunities to profit by getting long Wheat. Check out the Wheat daily chart below, it has put in higher highs and higher lows with the moving averages starting to fan out nicely in the correct order. We also have the MACD and RSI indicators making higher highs along with price which we call Convergence.
Once we have a chart which is trending strongly it becomes a waiting game. What we are waiting for is for any of our three trading strategies to setup. It's really important to have well defined trading strategies which when executed correctly give you an edge in the market. Trading without a strategy is the equivalent to driving somewhere new without a roadmap. In any case you'll be able to drive, but you're probably not going to get to where you want to go.
So none of our three trading strategies have setup on the Daily chart, therefore we will start to drill down lower through the timeframes until we see the potential for a trade. The timeframes we might drill down through would be the 960, 480, 240, 120, 60 and 15 minute timeframes. One of our trading strategies involves a flat level breakout and the other two involve pullbacks in a trend.
After drilling down through the timeframes there is no flat level setting up for now so that leaves us with the potential to get Long on a pullback within the trend. Of all the timeframes the 60 minute chart is now showing up a potential entry to join this trend Long. If you take a look at the 60 minute chart below can you see any reasons to get long? What interests us is the yellow highlighted area on the chart. At that precise level we have a 61.8% Fibonacci pullback, two Pivot points and two old highs all clustering together. A level like this which has multiple factors clustering together often means that price will find resistance here if we get a pullback to this level. This gives us an exact level to get Long Wheat with a stop loss just below the 100% Fib.
So keep your eyes firmly on this chart to see if we get a pullback to this level as it could provide a great buying opportunity should this play out. Fingers crossed we get a pullback before price starts moving higher.
Happy Trading!
Regards,
The TWP Team
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