GUNNER24 Trade of the Day 03/23/2020
The 1:3 Trade: Buy FDAX at 8180.00
Dear GUNNER24 Traders,
The 1:3 Trade: Buy FDAX at 8180.00
Our 1:3 trades are A) adjusted to a longer term, having a spacious stop-loss for the development not to be endangered and B) have to show a risk-reward ratio of more than 1:3.
THE BIG LONG?!
I remember writing sometime last week that the equity markets should not expect any help from Europe, because experience shows that the crash lows and a turnaround should be triggered by the US indices. Because of their market power and the high level of attention they always receive. I might be completely wrong!
The German 30 DAX/FDAX (DAX futures contract) index is sending out such clear signals that at least it has found an important crash low and is already in bounce mode, that it is hard to believe.
And if you weren't so scared yourself that all this would have to get much worse in the foreseeable future, you would have to bet your house and kids that the final low of the entire year 2020 has now been made and as a consequence it can only go higher for the rest of the year.
Well, of course you shouldn 't bet everything on strong long now, but a small size long expecting at least a stronger Dead Cat Bounce (DCB) seems justified when we look at all the MIGHTY SUPPORTS that together AT THE SAME TIME have kicked in at 7970 pts FDAX crash low environment last week.
First I will show you 2 GUNNER24 Up Setups on yearly base and the within existing supports on yearly & DECADE & even CENTURY base. The individual supports these 2 setups radiate unite to one BIG support cluster that now is reached and worked off. This BIG support cluster – of course – might be the most ideal backtest magnet within a still ongoing secular bull market!
This 8 Candle one, starting at # 1 // 1993 Low, I already analyzed a few days ago:
Setup measures into # 8 // year 2000 dot.com top and shows that at year 2018/2019/2020 alltime-highs the natural existing lower line of 2nd double arc resistance finally kicked in at these year highs. This lower line of 1st triggered the crash wave cause – likely – this lower line of 2nd represents at least longlasting DECADE, likely even a rail in the CENTURY time frame which might never be overcome on yearly closing base until lower line of 2nd runs out according time.
And such important resistances from time to time are able to trigger some important, even unusual strong retracements. And as always it is true that once a lower line of a GUNNER24 Double arc was reached the main trend could have changed. Or here in this individual case: ==> of course it is now allowed to think/assume that FDAX is now in multi-yearlong bear market, even in a Great Depression cycle which tend to last for a very long time until price has finally bottomed.
Well, watch printed crash lows next. This is easy read. Crash lows have arrived at first square line & lower line of 1st & last but not least at most natural = most normal = most attractive support that springs out of 1993 Low. And this is the 1993 1*1 Backtest Angle. Additionally the crash lows have tested 8005 pts 50% Fib retracement support of 2003 Low to 2020 ATH bull market leg.
There is no stronger support magnet possible as this first square line backtest magnet/lower line of 1st backtest magnet/1993 1*1 Backtest Angle magnet/50% Fib retracement support of this CENTURY bull market leg.
So it would be easy to claim that the year low now is finally made. And that' s why the only way FDAX has to choose next is the re-test of the 2018-2020 alltime-highs...
This is the yearly 5 Candle up starting at # 1 // 2003 Bear Market Low what arrived at 1*2 Gann Support Angle out of 1973 Low. For this check again setup above:
5 Candle up shows that lower line of 1st uptarget was reached at alltime-highs. ==> 2 valid GUNNER24 Setups on yearly base AT SAME TIME are signaling that important bull market highs have been reached at 2020 highs. And these combined resistance magnets have triggered fastest, deepest crash wave ever.
However, also this setup signals that an ideal overall bull market backtest area is reached now. In above case the first square line is now getting tested. This is the dark-green dotted line which is in natural sync with former important bull market highs (2000 dot.com bubble high & 2008 bull market high). Means, crahs low also AT SAME TIME has tested 3 of the most important horizonal supports of the bull run which started 1993.
==> 1. 7970 pts crash low has reached countless important supports at the same time. Ergo and usually, the market should now bounce strongly. At least for a few weeks.
==> 2. But it is also allowed to say that the low of the year is near/was cemented at past week`s made 7970 pts.
==> 3. However, if this support nest at 8000 down to about a 7900 pts is undercut or fails to hold in further course it should be clear that the NEXT lower important SUPPORT NEST = CONCRETE at about 6400-6500 pts should or might be worked off relatively quickly.
This next lower CONCRETE for 2020 is highlighted by the spot of 4 light-green arrows where a next ideal 1*1 Backtest Angle out of 2003 Low unites with possible Blue Arc backtest target and the two 61.8% Fib retracement supports at 6632 pts and 6228 pts.
Fine. Crahs lows have worked off combined yearly & DECADE & CENTURY bull market support magnet. This support magnet combination is unusual strong support. The ideal point to trigger the long-awaited bounce resp. usually strong enough to print the final low of entire trading year 2020!
Consequently it should at least trigger a bounce cycle like highlighted within weekly chart below:
How shall I say it, except to express my bullish astonishment. 7970 pts so far crash low with a 100% accuracy has reached and tested back the 1*1 2018 ATH Angle support. This is most strongest time/price bull market rail out of the very important former # 1 // 2018 alltime-high!
Also, and this adds to the expectation that at least a bounce is underway now, the weekly 4th double arc out of 2018 alltime-high is getting tested now. Means, also on weekly base some very important supports are reached and all these combined supports seen at crash lows are usually strong enough to trigger a Dead Cat Bounce which usually has to test back at least the 10200 resistance magnet within 20 trading days or so. For this watch the orange-dotted vertical which represents next due important time line that is due mid-April 2020!
Then and there is super-interesting Dead Cat Bounce upmagnet according time and price formed by the dark-red dotted rail, former major support – watch 2018 Xmas Lows for this – now usually very strong future resistance and the 38.2% Fibonacci retracement resistance level at 10208 = natural strong and resistance of this crash wave.
==> Identifiyed important Dead Cat Bounce uptarget at 10200 pts/mid-April!
The US markets are still very nervous, and volatility still at extremes, so DAX/FDAX is for sure not out of the woods. Therefore, a serious backtest of 7970 pts crash lows or the round 8000 might come true in course of the week. Yeah, even a small lower crash low is allowed to be printed perhaps trapping bears massively. But maybe such deep backtest will not come true cause of perhaps given bull strenght of reached CONCRETE support magnet..., therefore, I think a 8180 long-entry that is close to todays made 8133 pts overnight lows could make some sense.
==> Please buy FDAX at 8180.00 pts until this week Friday. ==> Buy-Limit order is valid till March 27!
==> The Dead Cat Bounce uptarget for the 1:3-FDAX long try is 10200.00 pts.
==> Please place the SL for this still risky FDAX-1:3-trade long attempt at 7950.00 pts.
Please use ETF, options, CFDs or warrants reproducing this trade. Buy when FDXM0 June 2020 contract trades at 8180.00 till this week Friday, March 27th!
Risk = 230 pts. Potential reward = 2020 pts. Risk-reward ratio 230/2020 or 1:8.78
GUNNER24 Trade of the Day orders for 03/23/2020:
Market: FDAX (FDXM0)
Orders: Buy-Limit at 8180.00. Stop-Loss (SL) at 7950.00. Dead Cat Bounce uptarget at 10200.00. Buy-Limit order valid till 03/27/2020.
Markets, Money Management and Trade Size
I will merely analyze the market. There are so many instruments in the world outside our GUNNNER24 Traders use to trade, and hundreds of popular ones among them, often depending on a trader’s time horizons... I don’t consider me able to adjust the market recommendations to all the popular ETFs, different CFD or futures contracts. All I’ll analyze is pure market action - the index, stock or most current contract and forex!
The trade size you should use depends.
A) On your account size:
I usually follow the rule of thumb which says, never bet more than 1% of your account size for each trade. So I avoid overtrading...
Let’s say you have got a 30.000US$ account granting you a nominal buying power of 300.000US$ up to 500.000US$ and even more, depending on your broker and instrument. In that case your trade size shouldn’t be more than 3.000US$-5.000US$ taking into account your buying power.
Another - more conservative - method is taking into account the available margin. Usually, 30.000US$ account value equals 30.000US$ available for margin trading. So the trade size is 300US$ taking into account the margin.
Within Trade of the Day I ask you not to bet more than this 1% per any trade.
The other point to consider for determining the trade size is:
B) if your trading style is rather active, supposing you regularly have 30-50 open trades, just as I have - CFD/ETF, here some stocks, there a future contract. So I often trade risky somehow, but I split the money/bets. Even in such a nice trend as the stocks are showing currently, I never ever trade too risky. I never load the boat with 70% let 90% of my account size. 50% is the maximum.
I trade for my living and for my kids and wife as well. A regular income is important. The big-bang bet isn’t! The market would win such a big-bang bet for sure!!
When I have a lot of open trades, maybe up to this 50% of my account size/available margin I avoid trading more. So if you are an active trader having a lot of trades running at rev limiter (50% account size) please avoid trading even though we/I give you some fresh recommendations, because this would rise YOUR risk!... During the test phase that happened frequently. We had 3-5 open trades sometimes and that’s why it’s elementary important that we/you have to use tight SL. Order management is absolutely crucial for Trade of the Day.
You’ll have to place really each and every order accordingly, you know. Forgetting only one time the SL would make this trade getting worse and worse…
Based on the George Douglas Taylor Trading Technique that I’ve been studied and originally traded for years transferring it onto the modern markets by constant observation a five day pattern of the single days of the week has resulted.
The crux is not so much that the entire week has to work perfectly. Perhaps it does just at a 50% because the day patterns may shift by one or two days. In the strong upwards trends sometimes you see 4 buy days and only 1 sell day. It’s important to recognize that the day proceeds ideally-typically and to trade accordingly.
My personal trading style has always been the contrary to that of the crowds because the crowds always loose. Especially in gold and silver trading I like to buy the corrections Monday to Wednesday and on Friday if the day patterns correspond with some important GUNNER24 Signals.
I use to go short intraday just on Thursday when the week high is sold off AND provided that the corresponding GUNNER24 Setups signal so covering the shorts when the cycle is resumed.
The ideal five day pattern in an upwards trend – precious metals and US stock market – Do use those patterns for your intraday and swing activities!
Monday: Buy day. Strong up-day. Low established first. It often ends at the day high. Unthinkingly you may buy all the intraday corrections because the week high comes later in the course of the week.
Tuesday: Buy day. Weaker up-day. A higher high is produced. As early as now the crowds ponder whether the prices mightn’t run too high partially going short already. For me it’s the day when I can cover my Friday and Monday longs. In intraday I try to go long in case of corrections until the Comex opening.
Wednesday: Sell day. Actually the day for covering the longs and for the first short entry. It’s got some different forms. It closes at the same level as it had opened. Frequently at first the high is established because more and more traders short the market. Here the longs fight against the shorts. You recognize that if many teeth, many nicks, many spike candles are to be seen in the chart. On Wednesday I use to do nothing. Only at a 20 to 30% the shorter hearts are pleased because during the whole day there’s only sell-off.
Thursday: The classical sell short day. Because the Wednesdays often close as they had opened the market participants have to cover their shorts because in the beginning the market runs quickly upwards…! And frequently they turn their positions into the high direction being caught on the wrong trail again. Then the market often lays down a beautiful sell-off. In the evening mostly a strong rally follows. That’s where we cover the shorts.
Friday: Classical buy day in the upwards trend. It’s nothing for weak hands. Here’s where you buy the positions near the Thursday lows which you cover again next Tuesday/Wednesday. If you discover that the prices have steadied or even are rising a little bit by closing the five day cycle should continue in the following week.
In the charts we work with the following symbols: