Good morning and welcome this morning to Trading Futures, another great webcast from Schwab Coaching. There were the opening bells, which means it's time to get rocking and rolling here. We're going to take a look at what's going on with economic events, what that impact is having on some areas of the market. And we'll take a look at maybe using some Fibonacci tools along with our futures discussion this morning. My good friend Michael Fairbourn out there in the chat helping me out. Michael is a 20-plus year veteran of the financial market. He is there to help answer your questions along the way. Thanks to all of you for being here, whether you're here in the live version or in the recorded version. It doesn't matter. We're glad to have you here in both places.
If you're in the recorded version, leave us a comment in the comment section. If you're here in the live version, chat in, talk to Mike. You can follow us on X at Ben Watson CS at Mike Fairbourn CS. We'll talk a little bit more about that in just a minute. But let's get to a couple of quick housekeeping items. Remember that everything we talk about simply for illustrative and educational purposes only is not a recommendation or When we talk about futures and futures options, remember that involves substantial risk. It's not suitable for all investors. Make sure that you are aware of those risks. Read the risk disclosure statement for futures and options prior to considering any futures strategy. Also remember that futures trading is not suitable for all investors.
And it does require separate trading authorization if we do happen to talk a little bit about or look at. Um. Futures on cryptocurrencies. Virtual currency derivatives trading does involve unique and significant risks. Make sure that you read the NFA Investor Advisory on virtual currencies and virtual currencies futures. And you read the CFTC Customer Advisory, Understanding the Risk of Virtual Currency Trading. Now, we're going to be using the Thinkorswim desktop software platform, specifically the paper money version of that platform. It doesn't do certain things the way that a live trading account can do. However, it's a great learning environment. None of those are guarantees as to what might happen in the future. Remember that we're going to use technical analysis here. There are other ways to look at the market, probability analysis, fundamental analysis.
All of them are theoretical. None of those are guaranteed. As to what the future holds. That just tells you that the future is not guaranteed. News can change everything. Remember that investing involves risk, including for some products, including futures, more than your initial investment. Remember that stop orders are not guaranteed in execution. In the case of futures orders. Stop orders that generate a market order, those will be worked as an exchange-designated limit order within protection points. We'll talk about that as we get into the discussion, something to pay attention to. So I want to jump out here really quickly. And jump right to the Thinkorswim desktop software platform because this morning we had a CPI number, Consumer Price Index number, come out. Largely in line with expectations, 0. 29% month over month.
Core CPI at 0. 23% month over month. We'll take a look at some news items here in just a minute. But the fact that those came in roughly in line, the fact that we're seeing some movement as far as kind of impacts of tariffs becoming maybe a little bit more salient in terms of what's happening to the market, which means a little bit less uncertainty, a little bit less uncertainty means a little bit more. Of focus on risk, on perhaps, and a little bit less focus on safe haven. That's the reason I'm looking here at forward slash MGC, which is the micro. Bold contract. And we can see the run that gold has made. In fact, we've looked at examples here in this particular class a couple of times in terms of gold.
Gold seems to, at least at this point, stalled out a little bit. We see on the right-hand side of this chart gold making a move to the downside today. So I want to zoom in on our longer-term chart just so that we can see some perspective here. And in fact, I'm going to open that up all the way. We're going to maximize that particular cell. And I noticed that at least today, gold kind of giving us this little bit of almost an inverted hammer type candle here at perhaps maybe a little bit of a support level. Nevertheless, some downward pressure. We can see the CCI, the Commodity Channel Index coming off a little bit. So let's talk through this particular contract really quickly as we're putting this trade together.
So our tick size is . 1. That means this is our significant digit, that . 7 that just turned to a . 8, just turned to a . 4. That is our significant digit that we need to pay attention to. And you can see that there is a little bit of volatility here because it's bouncing back and forth this morning as things get started. Tick value is $1. So each one of those changes is $1, which means that each time this number, the 2 in this particular account, this accounting of this number, 3, 3, 4, 1, that is a $1 change, or excuse me, a $10 change in the value of the contract. Total notional value of the contract, because this is the micro, is $33,421.
So from that, we can calculate our risk in the trade when we put this trade together and our potential reward. I noticed that I've drawn a level of support down here at around the 32. 6 level. We've got a level of resistance off the top here at about 34.9. So what I want to do is I want to kind of look at where this potential move might take this particular market. So what I'm going to do is I'm going to use my Fibonacci tools, and I've got my Fibonacci retracements on here. Listen, there are as many ways to draw Fibonacci lines. Retracement/slash/ extensions as there are Fibonacci numbers in the Fibonacci ratio. And I mean that literally because there's no one best way to do this.
One of the ways that you can do this is if you draw from the top of a move down to the bottom of the move or from the bottom of the move to the top of the move, you're going to get the extensions and the retracement's changing directions. So if you draw your Fibonacci retracements from this as the bottom of the move and make this the top of the move. So if you say this is 100% of the move. And this is the start of the move to the downside. Then we get a sense of where this is. So I'm going to zoom in a little bit so that we can see where this is at this point. And what I can see is that we're right about, there's our 50% line.
And in fact, let me do this. I'm going to right click and we're going to edit this Fibonacci tool. And so I'm going to change the style of a couple of these lines. I'm going to come into our 50% level, which I know here's the comment that somebody is going to make. 50% is not a Fibonacci number. You're right, but it falls in line with Tao theory, which is largely based on this idea of sequential symmetrical moves in particular ratios. So I'm going to make that line a little bit wider. That's the 50% line. So I'm going to make that a three point wide line. 61. 8, 78. 6 is still there. I'm not going to really need the 2. 618 or the 4. 263, which are those extension levels.
I am going to darken the 1. 61 level a little bit. That's going to be relevant. And I'm going to go ahead and click on OK. Now you can see where that 50% level is. We've broken that 50% level. Sitting at a short-term Fibonacci support right off of that $33. 39. 1. We're just a little bit higher than that. This morning. Now I'm going to switch over to my shorter term chart. Now I run a five-day, five-minute chart. You can see where that 50% level is. You can see the move that it made off of that 50% level, rallied up into that 50% level, and is moving down. The premise here behind this is the fact that gold oftentimes acts as a safe haven. And when the emotional.
A psychological perspective of using gold as a safe haven shifts from safe haven to risk on in other areas like technology, which is seeming to move to the upside today and removing potentially that inflation risk, which oftentimes gold can be a hedge for. We start to see a shift away from gold in the short term. And I think that's what we're seeing here at the moment, technically. So if I come back down here and I kind of shrink my scale. You can see where we are off of that 61. 8 Fibonacci level. So this is a move that we've potentially missed, but again, I get that. That's fine. So what I'm going to look for in this particular case is if I shrink this back down, a break below the 61.
8 level and a move at least down to the 78. 6, okay? All right. At least down to that 78. 6 as this is moving. But again, you've got to put this into perspective because while this looks big here on this particular chart, these are five-minute candles. And if we come back over here and we look at this on this range, that's really only this range from here to here, here to here. That's not a big move. And it reasonably we could be looking at this move back down to the. 32,51 level if we go back over to the longer term or to the shorter term chart and I squeeze this back down that could be the extension again, that's the 100% of that range that we defined as the recent move.
So as this breaks down below this level, there's a couple of points that we could take advantage of with the Fibonacci sequence ruler, because that's all this is, is a ruler graduated in Fibonacci numbers. Nothing magic about it. But that's an area where we're likely to see levels of support or resistance. So if we see this move down through that 33,38. 5 level, the next target is 3,300. 1. The next target below that, 32,51. 2; no guarantee that it'll go there but what I'm going to do is I'm going to put an alert here at the 33,000 level and if it's a big round number, that's oftentimes likely to be a level of support. I like the symmetry of that at 33,000 as a big round number, level of support.
That's the reason I'm going to put an alert there, because if this continues to move down through that level, I may want to add to the position simply from that standpoint that it seems to be accelerating. Take a look at the momentum to the downside of the MACD histogram here. So we're definitely seeing some downward pressure, but I'm going to zip back up here to, I know where my targets are. In fact, I'm going to set that alert right now, just so that I've got it there. I'm going to put that at 3,300, right click, create an alert. We'll create that single alert. And we're going to say, if the mark price on MGC Q25, that's the contract that we're looking at, is at or below, and I'm just going to make that 3 ,300 even.
So 3300, then let me know, ring a bell, send me a text so that I can see. I make a decision about what I want to do here. Bounce. Or break. That's the question that I'm going to ask at that particular point. So I've already got that alert in place so that I can do this, so that I can shift this scale. back to an auto scale and I can come back in here and I can see where I am so that I can set up the entry into this particular trade. Starting to see a little bit of a bounce. Momentum is backing off a little bit. I'm not necessarily just going to get into the trade right now from that standpoint, because it is kind of hovering a little bit in this halo of Fibonacci support.
Remember, this is just arbitrarily drawn. So this may be a support level. And if it doesn't break down through this support level, at least initially here as the cash market is getting up and running. Then this trade may not initiate and may not make that move to the downside. But what I'm going to look at here in this particular case is setting a sell stop. That says if price breaks this level, the 33,38. 5 level, then enter the trade, else wait. Same way we look at technical analysis and other perspectives. If this, then that. Not telling the future, not predicting anything. Fibonacci's can't predict anything. It's simply a ruler. Don't give a ruler, not a ruler as in a king. It's a ruler as in a measuring device.
Don't ascribe to it more weight. or mysticism than it really deserves to have because it simply is that. It's just a measuring device. So I'm going to come back down here and I'm going to put in here our initial entry point into the trade. I'm going to right click at that 33, 38 . 5, right click. And we're going to do this. We're going to buy or excuse me, sell custom. And we're going to sell custom with a stop, but we're going to sell this contract to the downside. We're going to click on stop. And we're going to make this a stop. Now, I need to determine where I'm going to make the stop. And the easy way to do that, the easy place to put that would be at that 50% level.
If this backs off and goes back up through that $0. 335 half mark. So I'm going to do that. That's our stop to get out of the trade. $0. 335 point. Five, okay? So $0. 335 . 5, entry is going to be $0. 338 . 5 if it makes that move to the downside. So here's what we're going to do. In order to determine our risk in the trade, we're going to come back over here and we're going to use our calculator. And we're going to use our calculator first of all to figure out what number of ticks. This is equivalent to right? So we're going to say, look, $33. 65. So let's do this. 33. 65 is our stop. 33. 65 .
5 minus that entry point in the trade. So once we get into the trade, that's going to tell us what our, that's going to determine where our risk is, right? It might not be exactly this. So this is theoretical in nature. So $3,365. minus, whoops. 33. 65 . 5 minus Our reported entry price, theoretically, $33. 38. point five and I'm gonna click on the equal sign. So that is 27 ticks. Okay. 27 ticks. Actually. Yeah, it is 27 points. In this particular case, 27 ticks is our number here. 27 ticks. So let's do this. While I'm thinking about it, because otherwise I'm going to forget. I'm going to come over here and I'm going to make that a stop order. All right.
So we need to change that to a buy stop or to a sell stop. Excuse me. Thank you. We're not going long. That's going to be our stop. Okay, why is this not letting me do that? i've got some uh okay i've got something that's keeping that from from letting me change that order. Let's do this. Let's go back and let's do it again. And notice that as we're talking, it's going the wrong way. So we're going to create that. We're going to do a cell custom with stop. And we're going to make that a there it is okay I it was squished together I couldn't see it so we're going to make that a stop and we're going to make that stop triggered at 33, 38 half.
And we're going to make our buy stop if it goes in an upward direction. 33-65 half. 33-65 half. There we go. We'll make that one good till canceled. We've already got our alert in place. Now I'm going to fire this order off and then we'll come back and we'll do the calculation. So I'm going to click on confirm and send, read through the order, make sure that we're aware of transaction costs here. We're going to put this in our futures group and we're going to click on send and we're going to put that order in place. I'm going to put on here, show orders, click on apply and okay. Now we can see where those orders are and they are lining up with those two levels, notice that.
This is a little bit weaker equilibrium candle here, uh maybe supporting this idea; this is a bit of a bear flag and it's starting to to kind of break down a little bit here in this particular case so I'm going to switch back to our other grid we know that our tick value is a dollar so that is $ 27 points. So 270. 200, and we have to take this by tick value. So 27 times . 01, or excuse me, not .01 point. One, 2 . 7 points. So 2 . 7 times 10, 2 . 7 times 10. $27 of risk in the trade. Okay. So fairly small amount of risk in the trade. We've gone through that calculation before, but we take the price move.
Move divided by the tick size equals the number of ticks. Ticks times the tick value gives us that move. That's where we're calculating that range. Calculation, 27 ticks or 27 points. It was 27 ticks. So tick value is $1. 27 ticks times $1 is $27 of risk in the trade. Alright. And this is the small contract. I mean, that's one of the reasons. So we take a look. Let's pop down here to our futures contract. Here's our MGC. Our initial margin, $1,650 in this particular trade to initiate that trade. Looking for that move to the downside. So now that we have that on the books and ready to go, let's do a couple of things here. Oh, by the way, speaking of that, we've got a feedback survey out there in the chat.
Do me a favor. Do Mike a favor. Help us out. Fill out that feedback survey. Let us know what you think. But let's pop back over here really quickly. I want to jump over to our Schwab. com website. And this is where I was pulling my information about the CPI number. So I went over here to today's events on the calendar. So I'm on the Schwab.com website. I went to research U. S. markets. And I'm coming over here to today's events. Scrolling down, and this is where we got the information about CPI, Core CPI and CPI Headline. And once I have that information, that is getting me to this understanding of what that impact might be to the market, kind of backing off of that inflation expectation, maybe more risk on.
So there's other economic news that we can pull out of this. We've talked about this page before. But what I'm also going to do now is I'm going to come up to the top to go to our trade page. And I'm going to go to futures on that trade page. And I'm going to go to the market overview. And that gives us our heat map. Now, we talked a little bit about this heat map last week as we start to talk about kind of that news flow. And. This is a heat map, much like we see on the Visualize tab on the MarketWatch, or the Visualize sub-tab on the MarketWatch tab on the Fingerswim platform. But this is specifically focused on this futures contract.
So taking a look at metals, I can see that gold is off a little bit, silver off a little bit, platinum and palladium up, copper kind of neutral at the moment. That's kind of where my thought process started. But the one thing that I started to look at here were a couple of things in the index space. So I noticed that, for instance, the E-Mini NASDAQ 100 futures starting to make a move to the upside, right? Up about a half a percent, a little over half a percent. Kind of like the Nikkei, that's as a result of some tariff influences and influences in the AI space, a removal of some of the trade controls on companies like NVIDIA on an individual basis, right?
And as we kind of look around the landscape, that may be beneficial for, say, for instance, the MAG-7 names and semiconductors in general, largely benefiting technology. So we see Nikkei up. We see the E-Mini NASDAQ up a little bit, right? Mighty Mouse, good to see you too. Thanks for being there. A couple of other things moving higher here. Arbob Gasoline moving a little bit higher. Despite the fact that crude oil is falling, refiners are advancing their push into profit margins as they get into summer blends. And, uh, refinery issues in, uh, Texas and elsewhere because of adverse weather in the Gulf coast. That's causing Arbob gasoline futures to move a little bit higher here, even though crude oil is coming down a little bit. Crude oil is at 66 and Arbob is at $2.
18. And they're going in opposite directions from one another. All right, let's take a look. Let's go back to the Thinkorswim platform here, and just pop back to our futures grid and just kind of see what's going on on an index basis. Russell 2,000 kind of staying about where it is. Not really moving higher here. Nevertheless, it has been reasonably strong. A little bit of an RSI divergence on the Russell 2,000. The ES, a little bit of an RSI divergence going on here, but kind of knocking on the door of resistance. But that's where we get now to the NASDAQ. Nasdaq starting to see that RSI hooking up back up into that overbought range, starting to move up into that extreme and seeing a little bit of that break to the upside here above the resistance level today.
So that was my next thought is taking advantage of potentially this upside move in the Nasdaq futures based on movement within that technology space. So I'm going to jump back to our Uh, features movers grid. And let's pop back. Our gold seems to be moving against us here in this particular case. And that's fine. Nothing wrong with that. That, you know. And that was the reason why we didn't just get into the trade to begin with, looking for this potentially to be a bear flag, but it started to move away from us. So, the other place that I'm going to look here now is the micro e-mini NASDAQ futures, forward slash MNQ. And again, going back to those Fibonacci moves. So this is always the challenge.
And this was one of the reasons why I wanted to talk about this. I'm going to zoom in a little bit closer on forward slash MNQ. And especially when there is kind of that perspective of being in clear air, breaking out of a resistance level. And if we look back on this futures contract, I mean, this is at least a 52 week high, if not an all-time high on the NASDAQ. So how do you determine where that next level of potential move might be, right? If you're looking at trading something like this in a bullish direction or even in a bearish direction, where do you look for that next level of move, right? So what I'm going to do is I'm going to change this back to my Fibonacci tool.
So we're going to come back down here to Fibonacci retracements. And I'm going to assume in this particular case that this resistance area, about the 23,049-38 level, is the top of my move. And I'm going to say that this is the bottom of the move. So if we're looking at this as being kind of a trend change, 624, it starts to move higher, then it runs into resistance, and now we're breaking out of that next level of resistance. That's going to be the area of the move that I'm looking for in this particular case that I'm looking to take advantage of. So we can see that it rallied up, it bounced off of, and now it rallied up again. And now it's breaking out of that 100% range.
So how is Fibonacci helping us? Well, the next level of Fibonacci extension above this area is this 161. 8 range. And that puts the index or this futures contract out around that 24034 level in terms of the next potential level of resistance. Not that it's a guarantee by any means. But it is a potential area where, based on Fibonacci, the Fibonacci tool, there could be some resistance, right? 24-0-3-4. You got it, Carol, right there, right? And the point three. is just because again, these are arbitrarily drawn, discretionarily drawn. Not arbitrary, because I drew it to a particular point and from a particular point. I didn't refine it very well. And I don't have to. Because technical analysis is not, even in futures, is not six significant digits of.
of precision, it is not too particular, not too precise, right? So we're looking for this move to the 24 . 034. in terms of that breakout. So let's do this. Let's put this order together and I'm going to come back to our shorter term chart to help us put this together. But let's quickly review. If we take a look at our tick size, it's 0. 25. Tick value is 0. 50. So the increments that these last two digits move in is in 0. 25 increments. So it goes from 0. 25 to 0. 5, 0. 75 to 0. 0 and then we get a point value increment right? So each point value that increments, the six going to a seven or the six going to a five is $2.
Notional value of the contract, $46,000. Initial margin on the contract. We go to the futures here and we go to forward slash M. In few initial margin, $3,261 per contract in this particular product. So let's put this trade together by going to the shorter term chart. And we're looking for upward movement. Now, this is where other forms of technical analysis that we've already talked about can come into play. Close above the high of the low day. Those types of things, right? I know, and again, there are many different ways, and James Boyd might do it differently. But there are many different ways to assume, to understand what is the low day within a pattern, right, within a pullback.
So for our purposes in this discussion, for our purposes in this discussion, I'm going to use the absolute low in this recent pullback. That absolute low, 23. 12 . 91 right here. I'm going to draw a line there. That's my absolute low. But I'm looking for a closing candle above. the high of that low candle right closing candle above the high of the low candle The low candle right now is this one right here. Started at 640 a . m. So that means my high for that candle is at 23 ,170. I'm going to draw that line across here. I'm looking for a closing candle above the high of that low day. Or in this case, since this is moving and the market is open.
Now I'm looking for a trade above the high of the low date. Now, have we crossed that low? we have well i've been talking so if i take that level and i activate it and i draw it across here Guess what? Our barrier to entry has now changed a little bit. We've got a new low; we've got a new low candle, it's this one right here. So, we need to do is take this level and bring it right down to the high of that candle. So, we've got a new low. That's our now new target to beat in terms of getting into this particular trade, right? That is the new target to beat at $23,148. Easier barrier to get into the trade if this starts to move in the opposite direction.
Still not a guarantee that we're going to get into the trade. Still not a guarantee of success in the trade. Just means that our risk potentially is less in this trade, entry is. So what I'm going to do is I'm going to right-click at that level. We're going to put this on before I can talk my way through this. I'm going to right-click and we're going to buy custom with stop in this particular case. Actually, we're going to buy custom with OCO bracket in this particular case. So two things that we're going to do. We know where our entry point is, right? It's got a trade above that level that we put in here, 23,149. That is our entry level, right? So we're going to make that a buy stop.
So wait until price gets to that level. Then let's put our stop order in place here really quickly. I'm going to make my stop if price breaks through that 50% or that 100% Fibonacci, 23, 108, 15. So 23, 108 is going to be my stop. In this particular case, 23/108. And I'm going to make that good till canceled. And then let's bring this order tool down. I want to squish this down a little bit because I want to look at trading this again back up to that 161 extension, 24034. I know, Carol, you already put it out there in the chat. I should have just looked there. 24 . 034. So let's bring our order entry tool back up here, and we're going to make our exit out of the trade.
If it goes in our direction, 23, excuse me, 24 . 034 even, we're going to make that one good till canceled. And that says sell only if price gets up to 24 . 034, but not before then. Sell if it goes below 23 . 034, or sell at 24 . 034. Now that's a limit order. So that's not going to get worked as a market or an exchange designated market order. But this one right here, that stop is going to get worked. So our price to get out of the trade may be a little bit different, but not hugely different. But there is the possibility that that order may move around our range quickly and that order would not get filled. So it's always a good idea to make sure that you're aware of that.
Pay attention to when you have stops on so that you don't forget. And don't run into the situation where a trade doesn't fill, and then it goes on to take a bigger loss, right? Okay. So on a bullish trend like this, oftentimes, H, I'll come back and do that. Let me do this. Come back and confirm and send. Read through the order. Make sure that we're of transaction costs in the trade. Initial margin is 32. 62. We're going to put this in our futures group. And we're going to go ahead and we're going to hit send here, and fire that order off. I'm going to open this back up. And we're almost there. It's going in that direction. You can start to see that momentum starting. And we just got hit.
Now we're in the trade. Now we're looking. Let's go out to the longer term chart. Let's pop back over here and see where that is. So H asks this question. And I want to talk through this question really quickly here. If this is the beginning of the move, I'm going to set that as the zero part, as the zero line. This is the top of the move. Above where the price is to determine where that next level of resistance is. So if that's the zero, that's the start of the move. 100 is the end of the move that I'm measuring. If I were to go the other direction, and I'll do that really quickly here. I'm still on the Fibonacci drawing tool. If I were to start up here at the top and draw down, whoops.
If I were to start at the bottom, excuse me, and draw up. To that level you can see that those extensions go the opposite direction; that would be the top as the end of the move, the star as the top of the move, and it would draw those in the opposite direction so, you draw them the way that you want to but that's the way that I do it from this perspective and I can flip it over depending on which way I go; right I can flip those extensions over. I just like to look at the bottom of the move as the start at 0, the top of the move at 100 as the end of the move, and then the extension above. That gets me to the level that I like to see.
Now it's starting to move in the direction that we want it to go. Pop over here to the shorter term chart. Starting to gain some strength here. We know that we've got our stop order in place here. And let's come back and let's make sure that we're showing our orders in this case, and click on Apply and OK. There's our order. To get out on our stop and here's our order up way up here to get out if the trade goes in our direction. So we're looking at that move moving higher here on the NDX but this kind of exaggerates it again because this is a five-day candle, and it squishes everything together. Um, but if we put this back on auto and we go back to the longer term chart, you can see that's not a big really a big range at all for the types of moves it may be multiple days here in this particular case.
But it is not a. a, uh, uh, I mean, that's not an enormous move outside what this index has done or what this futures contract has done before. Sia asks a great question. Would RSI movement have anything to do with the decision on which direction to draw Fibonacci's? That's an interesting question because that goes to your basic premise, right? The basic premise being, you have an opinion about direction. You choose an opinion about direction based on available inputs, whether it's trend, whether it's RSI as a confirming indicator to that trend. So if you were looking at a price running into a resistance, for instance, in this case. And the trend was up, as it is in this particular case.
and the RSI was moving higher, as it is in this particular case, although this is the CCI, but if we were to look at the RSI, it's moving higher as well, that may be an indication to support that upward extension, right? It speaks to your directional bias, which really, I think, ultimately has to be the first part of the decision-making process, right? All right, so let's do this. I've got one other, and we've just got a couple of minutes, a few minutes left here. But let's pop over here. The other one that I was going to look at really quickly this morning was forward slash 6C. So we've kind of done these in backwards order. But let's come back over here to our futures movers grid.
I'll restore the cells, and we'll come back to forward slash 6C, which is the Canadian dollar futures. And I was starting to do this with the Canadian dollar futures. Uh, early, and I was going to lead with this particular discussion and then the micro gold contract kind of caught my eye. But this is largely a function of that. But notice, again, this is where having that Fibonacci line on there can give us a sense of kind of the characteristics of the trade. Because my thought was in this particular case, and I'm just going to zoom in and we'll maximize this particular cell. My thought was in this trade, look, here's the zero line. That's the bottom of that move. Here's the 100 line. That's the top of the move.
And so I was looking for an extension, right? And I was looking for this to stay right at uh this 61. 8 level as a bounce but get into the trade if it breaks above the 78. 6 so right breaking from or bouncing from one level of the Fibonacci, breaking the next extension level and then making a move outside of that range, that's a big presumption. But what I'm noticing here as we switch to the shorter term chart, where those levels are there's that potential bounce here's that move to the upside. So I'm kind of once again at that same point that we were just a moment ago with the NASDAQ. I want to see, based on more kind of traditional approaches to technical analysis, a close above or a trade above the high of the low candle, right?
And I do too, Sia, as well. I use it quite a bit. But so at the moment, here's our low candle. We're kind of in that low candle. We can see that, right? So, that's now created a new low candle. That candle has not closed yet. And in order for us to get that, we've got to see that close above that candle. We've got to see that closing candle because I don't know where the high is going to be yet. We could see a significantly higher high. So I'm going to just make another kind of judgment here based on technical analysis and say, look, this level right here around the 0. 73 level is likely to be a level of resistance. It was the high of the previous candle.
So I'm okay extending this idea of a cross back above being an extension of that trade above or close above the high of the low candle. kind of perspective. I'm going to use that resistance at 0. 73229 as my threshold for entering this trade, looking for the move right back to here. And you can kind of see how these levels help us to lay these trades out. So I'm going to right click. I'm going to buy custom with OCO bracket. We'll just put these numbers in so that we can see there's our target 0. 73605. All right. So I'm going to come back over here. And these are shorter term trades. To be fair, we're going to first make this one a buy stop. We're going to make our target to the upside.
Point seven, three. You don't need to trade this short term. I'm not telling you that you should or should not. We're doing this to help illustrate how we put the trade together. Now, I'm going to take the trade off once we're in the trade if it goes below that Fibonacci level at 61. 8 at 0. 73149. So I'm going to make that down here. We're going to make that point seven three one four nine as our stop. We're going to make that good till canceled again. Remember, that's going to work as an exchange designated limit order. So there's the possibility that we get gapped around. And now we're going to put this order on, and we'll see if we get that move in this next candle up above.
But I don't know that we have time to wait for that next candle at the moment. Initial margin in the trade, $1,485. That's because it's the regular contract. And there's our transaction costs. We're going to go ahead and we're going to put this in our futures group. We're going to go ahead and click on send. And there it is. There's our order entry. There's our order to take the trade off if it goes in our direction at that next Fibonacci level. And there's our stop order at the previous Fibonacci level. And you can kind of see how these things are lining up. And I like that because visually we can see, we can get an idea of what our risk and reward is in the trade.
So much for coming and spending a little bit of time with me. Remember, there's that feedback survey out there in the chat. Fill out that feedback survey. If you want to learn more, this is a great place to do it. YouTube. com at Trader Talks Webcast. Click on the subscribe button if you haven't done so already. Come down here and search for 'futures', and you're going to get the whole series of playlists. Guys, thanks very much. Thanks to Michael Fairbourn and our great production staff for helping out. We'll see you guys again very soon. I'll be on later today as will Michael. Take care, everybody. Bye-bye.
