Birth of a trader

Quote from schizo:

Frank, as the creator of CL Redux thread, allow me to chime in by saying that folks who congregate in that thread are pretty laid back and, might I add, even helpful. We all go out of our ways to help each other out. We point out one's strength as well as weakness. Nobody looks down on you for having losers. So I encourage you to give another try.

Be that as it may, I specifically laid out a few code of conducts on the first page, of which flaming and outright condescension are strictly forbidden. Should you run into any of these problems, let me know.

BTW you obviously haven't met a real flipper yet. :D
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Thanks schizo, I haven't given up - not by a long shot! I'm just retooling, a part of the journey. My old strategy, arrived at by months of hard work, DID work, but always left me feeling like something was missing. There are many ways to skin a cat as the saying goes, and I'm just looking for a better way.

My only real worry with the CL thread is creating pollution from stupid posts.

Also - what's a flipper? I don't think you're talking about Real Estate.
 
schizo is right!

People who want to help won't waste their time posting demeaning comments. Everyone has had their share of bad trades.

The only thing people despice is asking for advice and then ignoring it.

There are a few people who have nothing constructive to say and only post negative stuff but you can put them on the ignore list.
 
Frank, a few thoughts:

1. Just my opinion, but Crude Oil futures is about the last market a 'rookie' (your description) trading flat price directional with $20K in capitalization should be involved in. Successful trading is a survivor's game - a large percentage fail at it because they burn through capital long before the necessary skills and workable strategy are acquired. Maybe cut your teeth in a 7% volatility market like Ten Year Notes instead of a 28% vol market. Earlier in the year you were fortunate enough to get one end of the sword, and now it's the other side of that double-edged sword. You can always go back.

2. Again, just my personal opinion, but using oscillators on a 1-minute chart in a 28% vol market is a bit chippy. IMO even 5 minute bars don't have the trend and trend correction perspective you need to gain some consistency in that market. My point being is that contrary to your post there is actually a great deal to be gained from chart sampling timeframes. And longer timeframes when used in the proper context do not increase risk - exact opposite.
 
Quote from bone:

Frank, a few thoughts:

1. Just my opinion, but Crude Oil futures is about the last market a 'rookie' (your description) trading flat price directional with $20K in capitalization should be involved in. Successful trading is a survivor's game - a large percentage fail at it because they burn through capital long before the necessary skills and workable strategy are acquired. Maybe cut your teeth in a 7% volatility market like Ten Year Notes instead of a 28% vol market. Earlier in the year you were fortunate enough to get one end of the sword, and now it's the other side of that double-edged sword. You can always go back.

2. Again, just my personal opinion, but using oscillators on a 1-minute chart in a 28% vol market is a bit chippy. IMO even 5 minute bars don't have the trend and trend correction perspective you need to gain some consistency in that market. My point being is that contrary to your post there is actually a great deal to be gained from chart sampling timeframes. And longer timeframes when used in the proper context do not increase risk - exact opposite.
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Thanks for your perspective Bone, I appreciate the input. I AM a rookie and probably will be for a few more years, but I am progressing. I made the commitment to trade full time back in January after years of 'hobbying' with different instruments and methods.

After coming to the conclusion that I don't have the attention span to trade more than one market at a time, I started focusing on CL exclusively around March. I'm committed to becoming a better trader (or will be committed). The 20k cap may be a problem, but I do have money management rules. Ironically, I started the year with $20k and after trading it into $16k, I'm back where I started. In a previous attempt at day trading years ago I went through about $16k before walking away with my tail between my legs.

I may lose this $20k. I won't be happy about it, but I'm OK with it.

Anyway, that's why I'm back in sim city. I can stay here for months before venturing out into the market again. When I left sim city the first time back in January, I felt comfortable in the stats I'd accumulated. After reviewing my past trades, I've decided to build a better mouse trap for myself.

What I meant by exposing myself to more risk in the higher time frames, is that the bars are bigger, and you need more room (i.e. money) to give your trade time to work. At the 1 minute level, I learned that my winning trades rarely took more than 10 ticks of heat, so I was able to tighten up my stops. That helped a lot.

Now that I'm going to be trading the 5 minute bars, I'm guessing that 10 ticks won't cut it. But on the other hand, I should expect more than 13 ticks of profit, too. I just don't know what the combo is yet.

One thing I learned about myself is that I absolutely, positively HATE holding anything over night. The higher volatility instrument is more suitable to my style.
 
Today I started to implement some of the new rules, with mixed results. I only took one trade today, and in hindsight, I can see it was more lucky than clever. Luck is a good thing, but not a valid strategy.


The market started off with a huge positive surge at 05:30 on news, and I don't trade +/- 5 minutes around news. 20 minutes later it made it's way back to the 20 EMA and bounced off. The 5 min stochastic gave a sell signal at 6:50, but there was news at 7 and the 15 min chart was indicating an up trend. In general, I'm scared of news events.

The 7am news caused a 150 tick drop and the market poked around looking for a bottom for the next hour. The 08:25 bar formed a perfect long legged doji at the bottom at 08:40, and the 5 min chart gave a buy signal at 08:45. However, the market didn't start moving again for 20 minutes. Also, at 08:45 the 15 min chart was still pointing down and just starting to round, so the new uptrend wasn't so obvious on that time scale.

Another sell signal came on the 5 min chart at the 10:15 bar, but the 15 min chart was pointing up, although it just had bounced off the 20 EMA.

Only 1 trade today:

07:35 - Long 73.82 for a 7 tick scalp. This was an agressive 5 min buy signal, right after the big drop. In hind sight I was lucky with this trade. There was only 14 ticks to be had before the down trend resumed.

Had I ignored the 15 minute chart, I may have taken these other 2 trades on the 5 chart.

For the 08:45 potential trade, the 15 min chart was seriously trending down, and I know the stochastic indicator doesn't work so well in a trend. Perhaps I need to modify the 2 time frame rule.

For the 10:15 potential trade, too many things were out of sync and I got vapor locked. Definitely need more screen time with these chart setups.

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Ok, I will chime in. Remove everything from your chart that you don't actually use as part of your signals for a long or short setup.

Have more objective rules for trade management, for example, are you going to keep a target and stop or is your plan to micro manage the trade after you got in.

I took only 1 long trade today on CL real money for 20 ticks of profit.

After getting in the trade, it went a few ticks in my favor and then I was 10 ticks negative. Around this time I am watching CNBC while my order management is automatically controlled by the AI. Trade is taking forever but in hindsight it may have been due to lunch hour.

As trade goes back to my BE, I think hey, I could now get out of this stupid trade at BE after being down 10 ticks, but I do nothing.

I then take a walk, get back and look at TV, and see trade is now 10 ticks in my favor. Wow, now I could actually make a profit out of this trade, so I go look at my computer.

I see the AI in the computer got me out for 20 ticks of profit just like I planned while I was not emotionally invested in the trade after I put money at risk. Profit and stops are not perfectly set by AI since I will make adjustments after trade is filled base on chart, then leave the AI to do its thing.
 
Quote from oraclewizard77:

Ok, I will chime in. Remove everything from your chart that you don't actually use as part of your signals for a long or short setup.
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I've got the 20 EMA on there because I hope to learn how price behaves around that line, plus I want it as a visual reference for the trend. The up and down arrows are remnants of an old indicator that I used to use and I suppose serve no purpose anymore, but does give me a warm fuzzy when I see it flash in my trade direction. You're right though, I should remove it.

Quote from oraclewizard77:
Have more objective rules for trade management, for example, are you going to keep a target and stop or is your plan to micro manage the trade after you got in.
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I do. Scalps are 7 tick target and 10 tick stops, and with-trend trades are 20 tick targets and 15 tick stops. In the past I have removed my target and managed the trade as a runner, manually moving the stop up to just under the previous bar. This works well when there are higher lows, but I've found I'm better off just letting my original target get hit.

Thanks for your input, I do appreciate it.
 
Two trades today, but thought about several more.

Trade #1
05:15 - Got a sell signal and went short at 73.18 for a 25 tick target. Was a little concerned about shorting this because of the strong upward momentum bars, but the trend had been clearly down. I did like the pseudo shooting star 2 bars prior, and the prior small downward bar.

05:55 - I liked the long here based on the failed downward push from trade #1, and the 4 previous bars with higher lows. However this was 5 minutes before the market opened and chose to not take the trade. There was a possibility I might have been stopped out on a 15 tick stop if I had waited too long to make the entry.

Trade #2
10:00 - Short 73.76 for 15 ticks. The second leg up just completed and after a doji top, got strong bar down. Entered at open on 10am bar. Since this was so close to the 20 ema, only went for 15 ticks. What I also liked about this trade was it appeared to be a failed push past the 06:15 high of 73.91.

First day of school for the kiddies, so spent some time away from the office and my concentration wasn't the best.

Thanks to a post by ammo, I found a poor man's MP indicator on the TOS platform. Watching price against that indicator was spooky. I definitely need to invest some time learning this technique.

Up 40 ticks today.
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Today I have the bitter sweet honor of correctly picking the day's trend, but still managing to lose 34 ticks on 5 trades.

I have been trying to trade more off of price action and less off of indicators, although I'm still using the stochastic and 20 EMA line. Consequently I'm giving my reasons and observations on trades while posting. I hope my new friends in the CL thread don't find it too distracting or annoying.

Trade #1
06:55 - Oil up 50 ticks from the open on several surges. 06:45 gave a nice shooting star on high volume at the top of the move. The next bar closed lower, confirming the trend change. Entered short 74.45 at the open on the 06:55 bar and was stopped out on next bar as trend resumed. Perhaps there wasn't enough rounding, or the upward momentum was too great. In any case, I'm OK with this trade and would take it again.

Trade #2
07:35 - This appeared to be the trend reversal I was expecting from that shooting star. After a strong +27 tick surge, the next 3 bars were inside bars, stopping the uptrend. The 07:20 bar was a -26 strong reversal, and the next bar brought oil down to the 20 ema. The 07:30 bar was a long legged doji that closed just under the 20 ema, indicating indecision. When the 07:35 bar opened down, I read (incorrectly) the decision of the market - down. Entered short at 74.48 for a full stop. I took this trade because the opening of the bar was down, and the 3 previous bars were down, and I wanted to get in early on the move. Need to be more suspicious/cautious of against-trend trades.

Trade #3
07:40 - After having been stopped out of the previous trade and now convinced the trend was resuming, went long at 74.48. After 2 bars, price seems stagnant and the stochastic continued to sink. Moved my stop up to -11 and was taken out on the next bar. I think this trade was unnecessary, especially since it was a loser. Need to wait for more confirmation. The trend was indeed going to resume, just not yet.

Trade #4
08:40 - In hind sight, I can see we were in chop. At 08:40 this morning, it looked like the market was making a second attempt to push through the ~74.75 HOD. Two strong reversal bars brought oil to below the 20 ema and I went short on the next bar at 74.45. The trend resumed and I was stopped out. This trade was clearly against rising stochastic lines. I guess I should either use 'em or drop 'em.

Trade #5
09:18 - After skimming the 20 ema with large, overlapping bars (barbed wire - why didn't I see it while it was happening?), oil started moving up with solid, non-overlapping bars, making higher lows, higher highs, on increasing volume. Entered long at 74.85 for +25 ticks.

From the Coulda Woulda Shoulda Department

Oil started an uptrend early premarket, and continued into the open. There was a nice 2 legged pullback before the open, bringing oil to just under the 20 ema. There was an entry on the 06:30 bar as oil bounced off the 20 ema with a shaved candle, indicating a strong open and close of the bar.

After the morning push to new highs, oil stalled at ~75.25. This was the 3rd attempt push past this level since last Monday. It looked like it was starting to turn down, but it started getting very whippy at 10:20. I thought about placing orders long and short around that first whippy bar, long at 75.40 and short at 75.15, thinking that it was going to break hard one way or the other. Fear of a 25 tick loss kept me from doing it.
 
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