Birth of a trader

I thought today was an excellent day on almost every market that I watch. It seems that everyone is back from vacation? So as I look at the charts I really see retracements happening right where they were supposed to especially in the CL. They lined up with my price action zones that I use to trade with so nicely it was divine!!! I'm not sure I can really explain it more than that! I have this new little pivot point indicator that I really like! it helps show you exactly where these "zones" are. When this thing started trending down as hard as it did. Even when it goes up a little look at where to take it short. I really like to use trend lines. So as long as the trend line doesn't break go with the trend! "Use the force", err "Use the trend, Luke". As they say all the stars were aligned today! :)
Best of luck!
 

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Quote from Handle123:

the range of the five minute bars is too great.
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Crazy day for 5-min bar ranges. Certain bars would appear small on the chart, but when I checked the range every protective stop I placed seemed totally non-survivable, even with breakouts. The volatility was insane at times. I got a bit of slippage on 40% of my trade entries, which confirmed I was on the right side of the market :cool:
 
Not happy at all with how I traded today. When I look at my 2 CL trades it looks downright embarrassing. My second trade in CL was a clear violation of a rule. I read these things over every morning before trading. What I usually do (and didn't today) is read the setup rules again as I see it forming. Didn't do that and paid for it. I wonder how many times I'm going to violate my rules before it ends.


Trade #1
Basically, I was in disbelief that CL could continue up. Higher time frame charts looked like price was stalling and starting to roll. What was really happening was price was forming a bull flag before the next push up, and trailing a buy stop was the thing to do. The only thing I did right on this trade was to hold it until the entry candle closed, then move my stop to the top of the candle. Got slipped a tick. -8 ticks.

Price was definitely slowing down, and all HTF charts were looking red. The 10:45 bar was a failed hammer, and the next bar was a strong red candle, closing under the EMA.

Trade #2
I waited for confirmation of the trend down, and here's were I screwed up. I ignored that 10:55 bar telling me this wasn't a strong move. I meant to enter at 90.14 (price was at 90.12), but CL jumped right as I clicked the order and submitted a market orderinstead of a limit order. Got 1 tick better, for what it's worth (nothing). -11 ticks.

I had 2 6E trades. The first one I was slipped a tick for a BE entry. Got 1 tick on the next one.

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Quote from frank8800:

Trade #1
Basically, I was in disbelief that CL could continue up. Higher time frame charts looked like price was stalling and starting to roll. What was really happening was price was forming a bull flag before the next push up, and trailing a buy stop was the thing to do. The only thing I did right on this trade was to hold it until the entry candle closed, then move my stop to the top of the candle. Got slipped a tick. -8 ticks.
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Frank, your belief or disbelief cannot move the price of oil. If you controlled enough money to trade 1000's of contracts, you could say, "This thing can't continue up, it just sold off like crazy yesterday and overnight! I'm gonna crush those insane buyers!" :D

So with our little trades we look to join the party thrown by the big boys. Price runs nearly 2 points off lows on high volume. Well that tells us a lot more people want to buy than sell, for whatever reason. Some people want to hedge against price making a run for new highs; some people want to buy because they're certain price is heading to test the previous highs and they want to make money; some people have been shorting and their profits are either about to evaporate, have evaporated, or their losses are becoming unsustainable. Whatever the reasons, we don't care, all we know is traders believe price is going higher and out of fear or greed, they're buying with a vengeance!

And when price pulls back verrrry tentatively between 11:30am and 11:55am ET, and forms a tight little channel (bull flag), you are looking for either a pullback a long entry, a channel break, or a break of the last pivot high. Or if you're SteveH, all three :cool:

Remember when price has run that far up, longs will be hesitant to sell until the trend proves it's ending because most of them are well in the money. Shorts will need to cover every pullback that resumes the uptrend.

Now, if price breaks out of the channel, fails to break the last pivot high and then comes back down to test the pivot low (89.64), you have a potential interim counter-trend short signal.

But even then, the bulls have control until price action convinces them price is going much lower.
 
May I ask you why? Why do you insist on doing counter-trend trading? You are totally doing counter-trend in the wrong market. The ES is one of the best markets to scalp as it is one of the most congestion markets that have volume.

And almost every time I see your against the trend trades, it is so far from the high or the low of a move.

When you explain your trades, it should be as to why of your gameplan or set of rules, ie. 1,2,3,4,5,6, but terms like "disbelief"
"looked" "stalling" "roll" "definitely slowing down" deal with what your brain thinks it sees, but they can not be tested. Trading by what you think is happening will make you lose money, but having very concise set of rules for entry and backtest the crap out of them can only make you better.

Nothing is ever too high or too low unless it is at zero.

And I never hear anything about using volume in your decisions, might as well take it off your chart. But on your first sell came after huge volume, which means will normally go higher. The high of the day, huge reduction in volume, then H&S pattern, starting trendline on 9:35 to 10:25, getting short on 10:35 been better.

Outstanding flag on 6E 4:45pst short, 5:15 sell and lows of the day were on higher volume and it form H&S low like the Crude and form another flag at 10:00 to sell.
 
Quote from Handle123:

May I ask you why? Why do you insist on doing counter-trend trading? You are totally doing counter-trend in the wrong market. The ES is one of the best markets to scalp as it is one of the most congestion markets that have volume.

And almost every time I see your against the trend trades, it is so far from the high or the low of a move.

When you explain your trades, it should be as to why of your gameplan or set of rules, ie. 1,2,3,4,5,6, but terms like "disbelief"
"looked" "stalling" "roll" "definitely slowing down" deal with what your brain thinks it sees, but they can not be tested. Trading by what you think is happening will make you lose money, but having very concise set of rules for entry and backtest the crap out of them can only make you better.

Nothing is ever too high or too low unless it is at zero.

And I never hear anything about using volume in your decisions, might as well take it off your chart. But on your first sell came after huge volume, which means will normally go higher. The high of the day, huge reduction in volume, then H&S pattern, starting trendline on 9:35 to 10:25, getting short on 10:35 been better.

Outstanding flag on 6E 4:45pst short, 5:15 sell and lows of the day were on higher volume and it form H&S low like the Crude and form another flag at 10:00 to sell.
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All excellent observations - thanks. Believe it or not, I do have a set of rules and setups. Today I violated some and paid for it, as it should be. I really was almost too embarrassed to post that chart.

And ... believe it or not ... I am trying really hard.

Why do I do this, you ask? Hell, I wish I knew. I also keep a real time spreadsheet of my setups that I don't take. I mark down the reason why I didn't take the trade, and I follow it through. I'm kicking butt on that. So why don't I take every setup? I don't know. I suppose that I'm too focused on cherry picking winning trades and losing sight of the positive expectancy of the longer term. Newbie pussy, I guess.

Last year was my first full year of trading futures on a full time, focused basis. I traded 468 contracts and after commissions, netted a whopping $650. The broker made 4 times what I made. Very uninspiring. I'm a newbie and I know it.

I appreciate your observations as well as others who are trying to help me. I will succeed at this. Maybe not this year, maybe not next, eventually.
 
ANY AND ALL trades have a 50/50 chance of continuation of the direction you want. I did 24 ES trades today, you think I cherry picked any of them? I have no clue of foretelling the future, I have no clue whether my heart will beat in next second, so how with your young experience can you cherry pick trades? Now if you have not backtested your methods well enough, I could understand why you won't take each trade.

There are some markets that trending methods work extremely well, so don't fight the trend of the 20EMA, energies and currencies. The ES is one of the most congestive markets around, can easily handle a few hundred contracts at a time at each price level, even if I make a mistake on entry, I can get out often at entry price, so if you have this "need" to do counter-trend trading, ES is the way to go, but in crude, to go for $500-1000 trades, trend trading the way to go. And the best way to start is doing the mini's, do two of them, take profit at $100 and let 2nd one ride, take add-on trades the same way.

There were some incredible trend trades today from 6:20 to 8:10 when huge volume coming in to show down move had ended, but due to huge ranges, would have to use one minute bars to take advantage of going long.
 
Personally, I believe in a lot of discipline in trading. Yet I still am not as good in that area as I would like to be either. If you can't see your trades 10 minutes or more out and already have a profit target, and stop loss set when you enter the market. I personally should not be trading. Having rules is good but if you don't live by them, you always let the big fish get away and I find myself saying "MAN, I could'da, would'da, should'da" and that's just a terrible feeling.

Recently I've been looking at a few different markets in hopes that I could trade 2 markets. If one wasn't moving the other would. yet that has really run me down a rabbit trail. Now I'm considering 4 markets and now sure which ones to trade. CL being one of my favorites because with the way I trade; you let CL run for 1-3 hours and gain $1-3k. Sorry for the rabbit trail there. Point being is I think to stay focused; follow your rules; and take every trade according to those rules (discipline!) Here's my little sheet that I use to mark all my trades.
 

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Quote from DoubleTop:

CL being one of my favorites because with the way I trade; you let CL run for 1-3 hours and gain $1-3k.
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Do you, personally, do this on a regular basis? If you do, how often does it work in a given month of trading vs how many times do you end up scratching a day's potentially nice profits during wide ranges?

Looking at charts after the fact, it's real easy to see where you can let CL run for 1-3K per contract on a trend day, but I would love to see you call your entries, stops and targets in advance for a week to see how often you can actually manage this in real time. CL Redux is a good thread for calling your trades.

I trade in chunks, as you know, having experienced two back-to-back trades of mine in a very short period of time recently, and I sometimes leave a large part of good moves on the table during strong trends, and sometimes get more than the day's range on range days. It all averages out, IMHO.

However, I would really like to experience someone capturing 1-3K moves in CL in a given day without doing it in pieces; especially someone who not only holds, but adds to the winner as it goes. This is something I now strive for, but my particular strategy does not handle this well at this point in my trading.
 
Was out of town yesterday and had to do office work today (plus leaving early), so no live trading.

CL was too whippy for me while I was watching early this morning, but took 2 sim trades in 6E for 5 ticks.

Per Handle123's recommendation, I sim'd ES today, doing my best to pay attention to the trend and selling pullbacks. I used a 6 tick stop and 8 tick target. The RR doesn't seem right, but the market appeared a lot gentler - at least today. Very strange to hold on to a trade that long. In CL and 6E, 10 minutes is a long time. Took 4 ES trades and had 1 loser and 3 winners for 18 ticks net.
 
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