CL Redux

[schizo]

Quote from F112358:

Do you actually use that barebones 5' chart for trading or you have something else in front of you?

Didntcha notice my broken crystal ball?

On a serious note, I got pretty damn lucky yesterday. Although I wish everyday was this easy, you and I both know it ain't. Yesterday was an exception. It played right into my hands.

Look at the daily chart and you will notice that 82 serves a major resistance. Hence I knew once 81.25 was pierced in the morning, we were off to the races up to 82. And, sure enough, the damn price stopped cold at 82 with a few ticks splattered around to gun the stops of those unassumingly naive noobs. That's what exactly happened at 2. And did it stood its ground!

So here was the plan:

1. On the 30-minute chart, there's a resistance at 81.25 that sticks out like a sore thumb. In the morning we initially crossed above this mark. We then came back down, even dipping below 81.25 for a brief moment, only to shoot back up. I entered just above 81.25.

2. Since the thrust up to 82 was quite strong, I didn't get out at 82. It was only after it slid back below 82 did I reversed to short with the stop placed just above the HOD.

3. MA(50) bounce. On a day of strong rally, you will more often than not see a bounce off the MA(50). Yeah, I monitor the damn thing although I hate to admit it.

4. Obvious, no?

5. This one was tricky at the time although I now see it more clearly. I initially drew a TL between the low at 3 and the next reaction low to come up with a reasonable target. But the next reaction low adjacent to 5 actually broke through that TL, thereby throwing me off course. I had to redraw the TL, which convinced me that price could drop down to 81-ish. As a result, I bailed out prematurely. And just what happens? The damn thing quickly climbs back up above the TL.

6. That's when another long was entered.

7. This one is a pure TL play. They call me the "TL king" for a reason.

Unfortunately and quite idiotically, I neglect to take money off the table on this trade. After all, wasn't I trading with the house money? But, damn, I surely didn't expect it to come back up so strongly. Needless to say, I got stopped out.

8. Once I saw the price dip back below 80, I took another short only to see it run back up again. Luckily, it soon fell apart and came tumbling down.

9. Guess where the plunge stopped? 81.28. Wasn't that like the resistance-turned-support I mentioned earlier? Personally, I was hoping we go down to 81 and didn't get out according to the initial plan. Hence, I stepped out at 81.37.

 

[schizo]

Quote from F112358:

Read this long thread and found the short unholy thread. Will take a while to read it. Here's a link:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=144884&perpage=40&pagenumber=5

Well, consider it as my first as well as last gift to the ET community. If you want to know anything about what I do, this is it. It explores every nook and cranny of my system. Well, almost everything.

 

[schizo]

Quote from NoDoji:

I only had 2 trades, because earlier I was watching the calls here and gleaning a lot of info, actually. Thanks to everyone making the live calls.

NoD, I'm not sure I'm even qualified to make this post. Be that as it may, I saw nothing wrong with your trades. Your entries were near perfect. Can you elaborate the reasons why those two shorts were initiated? Was it based on technical reasons? I'm merely wondering if you and I were on the same page. As for the exits, it appears that you weren't as sure as you were with the entries. However, you did the right thing by scaling out in such a situation. Do you usually have an exit plan in place for both stop and price target? It's always good to know in advance where you should be getting out. That way, if it doesn't reach your PT in time, you know there's a good chance of another reversal. All things considered, you were pretty spot on.

Thanks for sharing your trades and I look forward to more of your contribution in the future.

 

[NoDoji]

Quote from schizo:

Can you elaborate the reasons why those two shorts were initiated? Was it based on technical reasons? I'm merely wondering if you and I were on the same page. As for the exits, it appears that you weren't as sure as you were with the entries. However, you did the right thing by scaling out in such a situation. Do you usually have an exit plan in place for both stop and price target? It's always good to know in advance where you should be getting out. That way, if it doesn't reach your PT in time, you know there's a good chance of another reversal. All things considered, you were pretty spot on.

Thanks. I felt good about these trades technically. On the first one, sellers came in before the HOD was tested and in fact I almost jumped in right away, but decided to wait for confirmation, which came when sellers pushed price below the close of the previous bar. The momentum was great and I was able to place my stop at b/e immediately as price moved 10 ticks my way. I took off half when price paused and ticked up a bit at a level higher than the previous support level. I figured I book some profit in case that level truly became a higher low and led to a trend continuation breakout. I took off the other half when price ticked up right near the wick of the previous support level. I definitely could've been more patient with the second half.

The next trade was based on a second failure to test next resistance level after taking out the previous two levels from the retracement low. I put on the trade initially as an almost counter-trend scalp, figuring it was possible that second lower high from the HOD could lead to a retest of the retracement low.

My chart has a 20-bar EMA and 1.0 dev upper and lower Keltner lines. My initial profit target on this trade was 81.50, which was a dip to the lower Keltner. I took off half when price ticked up at the 20-bar EMA (that's a really common pivot point). I was pretty excited when price then dipped very quickly to 81.55, and I split my target limit order in two and moved 1 of them down further in case of a breakdown. However, price held strong and so I then moved my stop to 81.68 which was a tick or two above the top of tha current bar. The stop was hit when the 20-bar EMA indeed held up.

Then right at the point on your chart where you have #8, I was thinking to myself, "I can't believe those guys are actually trading this stale chop" and I stepped away for a quick break and missed that textbook shooting star, internal double-top failure to thrive, which led to "that CL thing" dropping 50 ticks in F11's favor

 

[Speciaul_K]

Quote from NoDoji:

Thanks. I felt good about these trades technically. On the first one, sellers came in before the HOD was tested and in fact I almost jumped in right away, but decided to wait for confirmation, which came when sellers pushed price below the close of the previous bar. The momentum was great and I was able to place my stop at b/e immediately as price moved 10 ticks my way. I took off half when price paused and ticked up a bit at a level higher than the previous support level. I figured I book some profit in case that level truly became a higher low and led to a trend continuation breakout. I took off the other half when price ticked up right near the wick of the previous support level. I definitely could've been more patient with the second half.

The next trade was based on a second failure to test next resistance level after taking out the previous two levels from the retracement low. I put on the trade initially as an almost counter-trend scalp, figuring it was possible that second lower high from the HOD could lead to a retest of the retracement low.

My chart has a 20-bar EMA and 1.0 dev upper and lower Keltner lines. My initial profit target on this trade was 81.50, which was a dip to the lower Keltner. I took off half when price ticked up at the 20-bar EMA (that's a really common pivot point). I was pretty excited when price then dipped very quickly to 81.55, and I split my target limit order in two and moved 1 of them down further in case of a breakdown. However, price held strong and so I then moved my stop to 81.68 which was a tick or two above the top of tha current bar. The stop was hit when the 20-bar EMA indeed held up.

Then right at the point on your chart where you have #8, I was thinking to myself, "I can't believe those guys are actually trading this stale chop" and I stepped away for a quick break and missed that textbook shooting star, internal double-top failure to thrive, which led to "that CL thing" dropping 50 ticks in F11's favor

So how many more days are you going to sim? It might get real exciting next week

 

[NoDoji]

Quote from Speciaul_K:

So how many more days are you going to sim? It might get real exciting next week

Going live Monday, come what may.

 

[NoDoji]

Tomorrow I'm going to evaluate Ninja and SierraCharts, both of which have been recommended to me by a few futures traders on ET. I would really like to trade directly off the chart. Anything will be better than IB's charts that I'm using. IB charts lag the DOM about a second or two and that's a pretty serious lag when trading CL, IMHO.

Any input would be appreciated.

 

[schizo]

NoD, as the old saying goes, "only fools rush in". I'm sure you're more than eager to make the plunge but I suggest you wait. Even though you might have spent many months observing the CL market, you did it haphazardly all the while spending a good portion of your time trading stocks. Yesterday being the exception, when was the last time you devoted the entire day to watching CL? Why don't you continue trading the sim throughout next week to see if you can crunch out the same result you got on Friday? The keyword here is consistency.

As far as the charts are concerned, NinjaTrader allows you to trade directly from their charts. You should also look into Open E Cry, which offers almost identical charts as NT (only better IMO). Of course, when you fund the account, the entire package is free.

 

[Speciaul_K]

Quote from schizo:

NoD, as the old saying goes, "only fools rush in". I'm sure you're more than eager to make the plunge but I suggest you wait. Even though you might have spent many months observing the CL market, you did it haphazardly all the while spending a good portion of your time trading stocks. Yesterday being the exception, when was the last time you devoted the entire day to watching CL? Why don't you continue trading the sim throughout next week to see if you can crunch out the same result you got on Friday? The keyword here is consistency.

As far as the charts are concerned, NinjaTrader allows you to trade directly from their charts. You should also look into Open E Cry, which offers almost identical charts as NT (only better IMO). Of course, when you fund the account, the entire package is free.

Or if your eager to start just trade half the size you would normally. Only reason I suggest is that there a days that cl will test your nerves.

 

[F112358]

Quote from schizo:

Didntcha notice my broken crystal ball?

On a serious note, I got pretty damn lucky yesterday. Although I wish everyday was this easy, you and I both know it ain't. Yesterday was an exception. It played right into my hands.

Look at the daily chart and you will notice that 82 serves a major resistance. Hence I knew once 81.25 was pierced in the morning, we were off to the races up to 82. And, sure enough, the damn price stopped cold at 82 with a few ticks splattered around to gun the stops of those unassumingly naive noobs. That's what exactly happened at 2. And did it stood its ground!

So here was the plan:

1. On the 30-minute chart, there's a resistance at 81.25 that sticks out like a sore thumb. In the morning we initially crossed above this mark. We then came back down, even dipping below 81.25 for a brief moment, only to shoot back up. I entered just above 81.25.

2. Since the thrust up to 82 was quite strong, I didn't get out at 82. It was only after it slid back below 82 did I reversed to short with the stop placed just above the HOD.

3. MA(50) bounce. On a day of strong rally, you will more often than not see a bounce off the MA(50). Yeah, I monitor the damn thing although I hate to admit it.

4. Obvious, no?

5. This one was tricky at the time although I now see it more clearly. I initially drew a TL between the low at 3 and the next reaction low to come up with a reasonable target. But the next reaction low adjacent to 5 actually broke through that TL, thereby throwing me off course. I had to redraw the TL, which convinced me that price could drop down to 81-ish. As a result, I bailed out prematurely. And just what happens? The damn thing quickly climbs back up above the TL.

6. That's when another long was entered.

7. This one is a pure TL play. They call me the "TL king" for a reason.

Unfortunately and quite idiotically, I neglect to take money off the table on this trade. After all, wasn't I trading with the house money? But, damn, I surely didn't expect it to come back up so strongly. Needless to say, I got stopped out.

8. Once I saw the price dip back below 80, I took another short only to see it run back up again. Luckily, it soon fell apart and came tumbling down.

9. Guess where the plunge stopped? 81.28. Wasn't that like the resistance-turned-support I mentioned earlier? Personally, I was hoping we go down to 81 and didn't get out according to the initial plan. Hence, I stepped out at 81.37.

Since this is a game, and everything is possible, here's a "new game":

1-Everyday increase the default number of contracts traded by 1.
2-After a big win, take the rest of the day off. In friday's case this happened for you on trade number 1.
3-Use the extra free time to beat the wife, torture the neigbour kids, play with your own kids, eating good, exercising, hiking a trail or other soul enhancing activities, fully enjoying being a winner.
4-Compare your new P/L to your usual P/L with 3 cars after a month of "beating" the wife, etc.
5-If the "new game" doesn't cut it for you, at any point during the month, go back to your current rout.

I'm going to try this after some more experience in this wild market. As you can see I aborted the equivalent of your trade number 1, and only "got lucky" at the end of the day.