Birth of a trader

[FirstDegree]

Got this tip from someone else.

On your chart, go to your indicators screen and on the active EMA indicator change the Calculate On Bar Close to False and you will have your EMA on the current bar rather than having it lag.

 

[NoDoji]

Quote from frank8800:

Trade #1
After the big bull bar at 05:55, I looked at the 60 min chart, which was still up and had just come off its EMA. Then I looked at the 1 min chart for an entry and went long at 82.50. Resisted the urge to lock in 10 ticks (yay). +25 ticks.

Curious what was your signal to exit this trade @ 82.75? 82.75 was 1 tick above previous resistance, so your target on the long position would be at least 20 ticks higher or a breakout through the overnight high. You would expect a breakout of the high once price broke 82.74 because of price proximity to that high. In fact, consider placing a buy stop 1 tick above the overnight high to add a contract to your winning position. The first possible signal to take profits on this trade was @ 83.12.

If you took 25 ticks because you chose that as a fixed target on all trades, I recommend using mental targets instead, because if price comes in hard toward that level, you don't want to be taken out of a good move. I've been taken out of really strong trades early because I was unable to move my hard target in time.

Limit your losses (hard stops) and let the winners run (mental targets).

 

[frank8800]

Quote from NoDoji:

Curious what was your signal to exit this trade @ 82.75?

If you took 25 ticks because you chose that as a fixed target on all trades, ...

Yes, fixed target of 25 ticks.

I'm trying to learn 1 thing at a time. Step 1: find and enter profitable trades. Once I build a little confidence and can think on my feet better, I intend do exactly what you're suggesting.

At least I took the training wheels off by eliminating the trailing stop.

 

[frank8800]

Today was very choppy with no clear, lasting trends. Managed to escape with minor burns.

I didn't take the first short at 05:15 because I just got to the office and noticed it with only a minute or two to make up my mind. Since I don't like being rushed, I passed on that winner.

Trade #1
After a weak push through the EMA, got a bigger bear bar that closed under. Shorted 82.12 and got out BE+1.

Trade #2
After the push up to the HOD, a nice trend back to the EMA formed. Went long at the close of the 07:50 bar and was filled at 82.61. Was expecting a test of the high, but only got another BE+1.

That failed push to the HOD was followed by another, even weaker attempt, and a second lower high was formed at 08:25.

Trade #3
I viewed the 08:45 bar as a failed break out, and a close below the EMA, so I entered a stop sell at 82.56 which was the low of the last bar to close above the EMA. Since the EMA was still rising, I was expecting another attempt to push higher, and was hoping to fade the extreme. I put a tight stop of a few ticks above the failed break out bar, but was stopped out. -7 ticks.

I wonder if anyone else saw that trade the same way I did. (Feel free to chime in...) I was conflicted about taking it because the 08:45 bar was an outside bar that spanned the EMA, but decided to take a chance mainly because of the lower highs being made and a close under the EMA.

Switched to sim.

Trade #4
A little late to the party on this trade, because I wasn't paying attention like I should have been. Entered short at 82.41, 1 bar too late. Trailed my stop to the high of each bar as it closed, and was stopped out with a small monopoly money gain. +6 ticks.

After looking back on this day, I'm not sure if I could have done any better. I'm looking forward to reading other CL journals for tips. I thought about trading off the 1 minute chart or throwing on some Bollinger Bands and trying to fade the extremes, but at this point in my trading career, I'm not nearly that good.

 

[FirstDegree]

Quote from frank8800:
After looking back on this day, I'm not sure if I could have done any better. I'm looking forward to reading other CL journals for tips. I thought about trading off the 1 minute chart or throwing on some Bollinger Bands and trying to fade the extremes, but at this point in my trading career, I'm not nearly that good.

Honestly, be optimistic that you are taking trades. As for me, I couldn't take a trade if someone else was clicking the mouse for me. haha To us just starting out this is our education, our tuition, to trading. Often I think to starting any other business where most businesses are not profitable immediately. The problem with trading is that we get immediate feedback whether we "could" have made money, or if we were better off staying away. In any other business we really only make money when the sales come in so the potential profits or losses are invisible. You never know if a potential sale is coming or if they change their mind that you will never know about, or if your competitor stole the sale. If all of that makes sense

Try not to fall into the trap to thinking that more market analysis will make you better off. Take what you know now and refine it, make it better, see it better, find the little details that make the Crude Oil market move the way it does, such as 1 tick failed lows or highs, and bounces off the EMA. A lot of 1 or 2 tick failed moves or failures at major support and resistance end up becoming good trades in the other direction. The question is, can you flip your bias that fast?

 

[Picaso]

Frank, you're plotting your trades manually, right?

(Just in case you don't know, you can have them plotted automatically: Right click on chart > Data Series > at the bottom on the right "Plot executions"; this would make it easier to follow your trades as well - of course, if you have some reason to do it like you do, be my guest ).

 

[frank8800]

Quote from Picaso:

Frank, you're plotting your trades manually, right?

(Just in case you don't know, you can have them plotted automatically: Right click on chart > Data Series > at the bottom on the right "Plot executions"; this would make it easier to follow your trades as well - of course, if you have some reason to do it like you do, be my guest ).

Yes, plotting manually. I'll try using that feature tomorrow if I remember. I've found that sometimes the text gets messy if the trades are too close together.

 

[frank8800]

Quote from FirstDegree:

Honestly, be optimistic that you are taking trades. As for me, I couldn't take a trade if someone else was clicking the mouse for me.

Try this ... wake up tomorrow and say, 'Today I'm going to Disneyland and it's going to cost me $100 to play(or some number you're comfortable losing). It's $100 to walk in the door (at least!) and look around.

Then set your ATM stop at some fraction of that (half or third). That will give you a couple of trades. Then, after you place your order, as soon as you get 2 or 3 ticks to the good, move your stop to BE+1.

The worst that will happen is you'll lose the small amount of money you knew you were going to lose, and the best that will happen is you'll get a winning trade, or a few break even trades.

If you give yourself some wiggle room on the stop, you might find you can get your stop moved quickly to BE+1, then you can watch for free.

Note this isn't a trading strategy, just a way to break the fear of losing a few bucks.

I've got a set amount I'm willing to lose everyday, and that amount rolls to the next day. If I reach my daily stop limit, tomorrow's limit is tighter. If I hit that too, I'm done for the week.

 

[NoDoji]

Quote from frank8800:

Trade #3
I viewed the 08:45 bar as a failed break out, and a close below the EMA, so I entered a stop sell at 82.56 which was the low of the last bar to close above the EMA. Since the EMA was still rising, I was expecting another attempt to push higher, and was hoping to fade the extreme. I put a tight stop of a few ticks above the failed break out bar, but was stopped out. -7 ticks.

I wonder if anyone else saw that trade the same way I did. (Feel free to chime in...) I was conflicted about taking it because the 08:45 bar was an outside bar that spanned the EMA, but decided to take a chance mainly because of the lower highs being made and a close under the EMA.

I define a failed breakout when price approaches a previous support or resistance area, breaks through it 1-5 ticks and retraces back through the breakout price.

The 8:40am PST bar broke through the 8:35am bar high (which took me out of my 82.62 short b/e after running just shy of my 20-tick minimum profit target) and closed above the 20 EMA (I think I label my times as the bar open, so 5 mins off from your labels). The 8:45am bar broke through the 8:40am bar high and closed above the close of the 8:40am bar. You're now above the 20 EMA off a higher low. When price finds support at a higher low, it will most likely break through previous resistance (82.74). These breakouts of previous bars that pull back a little from the high of the bar are not failed breakouts; they're just little price pullbacks that normally occur in a directional price move.

The only signal at this point is long, targeting a break through 82.74, followed by a break through 82.80, followed by a break through 82.88. Any of these pivot resistance level breaks that only break by 1-5 ticks and pull back below the breakout price can then be defined as a failed breakout. Price eventually breaks 82.74, then 82.80, but pulls back from 82.81, which I define as a failed breakout. If you're quick and nimble with a 1-min chart or the DOM, you can counter-trend short for a ride back to the 20 EMA or better. The R:R for shorting the previous bar break is no good because the fbo bar (big red bar with a wick) is too big for me. The "safe" entry would've come off the 1-min chart.

I chose to be the second mouse because I missed the 1-min counter-trend early entry signal. I shorted the break of the 9:10am bar low, because it was a small doji-like bar, allowing a tight stop and a quick b/e exit if price found support at the 20 again.

An example of a downside failed breakout is when the price broke the 7:40am PST bar low (82.40) by 2 ticks during the 8:05am bar. Instead of locking in 20-tick profit on my 82.63 short when price got there, I waited for it to break that earlier fbo price of 82.38, assuming that's where the patient longs would start to lose hope and drive price down further.

 

[frank8800]

Quote from NoDoji:

I define a failed breakout when price approaches a previous support or resistance area, breaks through it 1-5 ticks and retraces back through the breakout price.

The 8:40am PST bar broke through the 8:35am bar high (which took me out of my 82.62 short b/e after running just shy of my 20-tick minimum profit target) and closed above the 20 EMA (I think I label my times as the bar open, so 5 mins off from your labels). The 8:45am bar broke through the 8:40am bar high and closed above the close of the 8:40am bar. You're now above the 20 EMA off a higher low. When price finds support at a higher low, it will most likely break through previous resistance (82.74). These breakouts of previous bars that pull back a little from the high of the bar are not failed breakouts; they're just little price pullbacks that normally occur in a directional price move.

The only signal at this point is long, targeting a break through 82.74, followed by a break through 82.80, followed by a break through 82.88. Any of these pivot resistance level breaks that only break by 1-5 ticks and pull back below the breakout price can then be defined as a failed breakout. Price eventually breaks 82.74, then 82.80, but pulls back from 82.81, which I define as a failed breakout. If you're quick and nimble with a 1-min chart or the DOM, you can counter-trend short for a ride back to the 20 EMA or better. The R:R for shorting the previous bar break is no good because the fbo bar (big red bar with a wick) is too big for me. The "safe" entry would've come off the 1-min chart.

I chose to be the second mouse because I missed the 1-min counter-trend early entry signal. I shorted the break of the 9:10am bar low, because it was a small doji-like bar, allowing a tight stop and a quick b/e exit if price found support at the 20 again.

An example of a downside failed breakout is when the price broke the 7:40am PST bar low (82.40) by 2 ticks during the 8:05am bar. Instead of locking in 20-tick profit on my 82.63 short when price got there, I waited for it to break that earlier fbo price of 82.38, assuming that's where the patient longs would start to lose hope and drive price down further.

I normally wait a bar for confirmation (not sure why I didn't today), and had I done that on Trade 3, I would have seen it as a long. Even so, that second lower high had me thinking the long side was done for awhile. I need to keep an open mind about these things.

How soon after you reach 20 ticks in profit do you move your stop? And does it depend on your profit target?

Thanks again for the analysis. More food for thought.