Birth of a trader

Quote from FirstDegree:

Trade 4 you mentioned Brooks and his "failed failure failing." Could you explain in your words based on that bar what you mean by that?

I've read the book. I don't want you to explain to me what Brooks said. I want you to put it in your own words based on this specific situation with this specific bar and the preceding action leading up to it.

Thanks.
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I'll interject an opinion here about it. After a strong selloff through the night and into the NYMEX open, price found support, pulled back, established support at a slightly higher low, broke previous resistance, pulled back to a higher low and closed above the 20 EMA. Looks like the selloff was a normal pullback in the range, left a low above yesterday's low and should well head back up to the upper end of the range based on this higher support level.

That shooting star at 10:35am ET was a red flag because the break through 50% retracement of the last leg down was met with rapid selling. Many would construe it as a short signal since the move up failed. If price failed to break back up through its high, it would likely make a measured move down at some point.

However, if price pulled back and then returned to break out through that bar's high, you have a failed failure, and a very likely move to next resistance.

In fact I had a buy stop at 82.23 for a while until it was clear the trend was still down.
 
Frank,

Don't let today get to you, it was a quite unusual day (meaning that you will only see days like these every once in a while), while it's all too tempting to think you shoulda/woulda/coulda made a killing, not getting slaughtered in this kind of day is actually, imo, a good result.

When CL starts moving at its open, it MOVES, sometimes you just have to bite the bullet without waiting for a pullback that is not going to come anytime soon.

If you have to leave (to run errands, have lunch, etc.), leave both physically and mentally. If you start thinking things like "Missed another 100 tick move" you will go <i>loco</i>. :) Also, I've found that having pending errands, etc. interferes with my concentration, so I decide beforehand whether I'm going to be trading or doing something else - and stick to it.

[A tip for Ninja charts: if you right-click on the scale axis and select Properties, you can select a fixed value (say, 20 ticks) for the horizontal lines. That way, you can see volatility at a glance (and not be misled by seemingly large bars in a narrow range or viceversa).]

If Nodoji and you continue to discuss Brooks' failed failure failing flips, I'm not coming back... where's that Tylenol? (j/k) :D

Edit: Ah... advice, the only commodity where supply always exceeds demand :D
 
The reason why I asked was because I felt like what you saw as a failed failure failing was not the same as what I understand it as. I have only been following your trading for a couple days now so maybe I just don't understand how you trade. I do notice that you get into trades as the previous bar closes and/or other times that I would think are early.

It's also possible that I'm getting confused by the failed failure failing, as in any range we could really go with a failed failed failure failing that failed. The longer out you go the more price changes direction and the more confused I (we) get! It could just be that I don't quite see it in your chart. Honestly, I think it's better if we try to not confuse ourselves with these kinds of things as it could often lead to not understanding how to manage the trade properly.

I was going to try and explain my understanding, but my brain seems like it's ready to give up and call it a day.

Reading through NoDoji's explanation it seems like she states it more clearly, but trying to think about what is going on here confuses me in that I'm not sure if she is agreeing with your explanation or basically just giving her own explanation, which is different than yours.

As I was watching price action today and we had that big "shooting star" my initial thought was range and possibly going lower so I was confused when you went long there.
 
Quote from FirstDegree:

The reason why I asked was because I felt like what you saw as a failed failure failing was not the same as what I understand it as...

It's also possible that I'm getting confused by the failed failure failing, as in any range we could really go with a failed failed failure failing that failed. ... Honestly, I think it's better if we try to not confuse ourselves with these kinds of things as it could often lead to not understanding how to manage the trade properly...

Reading through NoDoji's explanation it seems like she states it more clearly, but trying to think about what is going on here confuses me in that I'm not sure if she is agreeing with your explanation or basically just giving her own explanation, which is different than yours.
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http://www.youtube.com/watch?v=SzfiBMRDc5Y
 
Quote from Picaso:

Frank,

Don't let today get to you, it was a quite unusual day (meaning that you will only see days like these every once in a while), while it's all too tempting to think you shoulda/woulda/coulda made a killing, not getting slaughtered in this kind of day is actually, imo, a good result.

When CL starts moving at its open, it MOVES, sometimes you just have to bite the bullet without waiting for a pullback that is not going to come anytime soon.

If you have to leave (to run errands, have lunch, etc.), leave both physically and mentally. If you start thinking things like "Missed another 100 tick move" you will go <i>loco</i>. :) Also, I've found that having pending errands, etc. interferes with my concentration, so I decide beforehand whether I'm going to be trading or doing something else - and stick to it.

[A tip for Ninja charts: if you right-click on the scale axis and select Properties, you can select a fixed value (say, 20 ticks) for the horizontal lines. That way, you can see volatility at a glance (and not be misled by seemingly large bars in a narrow range or viceversa).]

If Nodoji and you continue to discuss Brooks' failed failure failing flips, I'm not coming back... where's that Tylenol? (j/k) :D

Edit: Ah... advice, the only commodity where supply always exceeds demand :D
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Thanks for that NT tip, Pacaso! That did help. I'm constantly trying to figure out how big a bar is to judge my risk.

I was reading somewhere about the logic of having a fixed stop. That author believed that the stop should depend on the situation, that there's nothing special about a certain number.

The 5 minute chart has more risk associated with it then the 1 minute chart I used to trade, and now I'm thinking I may need to increase my stop to stay in trades longer. That 2 bar reversal is a good example. It was a nice setup and a 30 tick winner, but it would have stopped me out had I taken it.

What's your philosophy on stops? Fixed, or situation dependant?

I'm not too wrung out about today. The way I figure it, not losing money is a good day. And Mirus needs the commissions.
 
Quote from FirstDegree:

The reason why I asked was because I felt like what you saw as a failed failure failing was not the same as what I understand it as. I have only been following your trading for a couple days now so maybe I just don't understand how you trade. I do notice that you get into trades as the previous bar closes and/or other times that I would think are early.

It's also possible that I'm getting confused by the failed failure failing, as in any range we could really go with a failed failed failure failing that failed. The longer out you go the more price changes direction and the more confused I (we) get! It could just be that I don't quite see it in your chart. Honestly, I think it's better if we try to not confuse ourselves with these kinds of things as it could often lead to not understanding how to manage the trade properly.

I was going to try and explain my understanding, but my brain seems like it's ready to give up and call it a day.

Reading through NoDoji's explanation it seems like she states it more clearly, but trying to think about what is going on here confuses me in that I'm not sure if she is agreeing with your explanation or basically just giving her own explanation, which is different than yours.

As I was watching price action today and we had that big "shooting star" my initial thought was range and possibly going lower so I was confused when you went long there.
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Dude ... I'm no roll model. If something I do doesn't make any sense to you, there's probably a good reason for it. Maybe it was a dumb trade. I'm doing the best I can with what I've got.

What I am sure of is that I feel this. Trading is what I want to do. I'm sure it'll be many, many more months and perhaps years as well as thousands of dollars in losses before I'm consistently profitable to the degree I want. I'm OK with that.
 
Quote from frank8800:

What's your philosophy on stops? Fixed, or situation dependant?
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I have a fixed <i>maximum</i> 20 tick stop for CL & euro (10 for ES & Treasuries, etc.) that I tighten more or less based on the situation.

Some of the most successful oil traders in this board trade with either a tight stop (Nodoji 10-15 ticks, EON Kid 10 ticks) or have a no-hard-stop wider average-in approach (StartTraitor, Ammo, RiskAddict when he doesn't blow up :()

I would say that the way most people trade oil intraday, much wider stops are a losing proposition (extremely tight stops can be frustrating of course).

If you find trading off the 5' chart a tad too risky for your taste, you could try trading QM/mini-CL (1 tick = 2.5 cents = $12.50), but since you tend to enter (I understand) with stops on breakouts, you will suffer increased slippage.

IMHO the best policy for stops is simply entering the trade without hesitation when you get a signal, that way you can trade with ridiculously tight stops (ask Nodoji about her 5-lot counter-trend specials :p).
 
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