CL Redux

Quote from jj69:

Ya, ES can truly be a dog, also why it's the hardest market to trade profitably. On second thought, I stand corrected on my opinion. I can see how someone can be profitable trading one market but not another executing the same method/trading plan. I think that has more to do with the trader's proficiency with his/her method than differences in the markets tho. But who cares what you trade to be profitable as long as you are.
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It all comes down to the feel factor and your level of confidence. Without those two, you're a dead meat in any market my friend.

And speaking of ES, I've been married to that bitch for nearly 10 years and am I glad to finally kick her out of my life.
 
ryhthm..sal , the traders panel of 6 or 7 on cnbc evenings, , the guy with the italian last name, i've heard he trades upwards of 60% of the volume in the oil pit, if you are trading on feel, u may have figured out his
 
Quote from NoDoji:

I've been sim trading CL for months now, net profitably, so it's not like I just started working with it. The problem is, my sim trading was always sporadic because I've been trading stocks. The other problem is that as a result of sim trading CL in this cavalier manner (rather than focusing on it completely which I did Friday as well as the previous Thursday and Friday), I tested a lot of strategies including a couple of average-down strategies. Only once did an average-down strategy result in a loss for me.

After a while I realized that although this was very easy to do in sim emotionally, it was not a safe way to trade CL because so often there are these "bars of doom" that appear out of nowhere and if my very large stop was hit on one of those moves, I would not be in a very good state of mind.

So what I've been doing over the past week is focusing on well-timed technical trading with tight stops placed at invalidation points.

Thanks, Austin, for the QM idea. I will check that out.
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First, I believe the slippage is bigger in QM than CL. Also I've seen some sudden jerks in QM chart that were wholly absent in CL. Are they just freak accident or what?

I don't advocate averaging down in any market, especially for CL. The reason is simple. This market likes to gun the stops. Rather you need to learn how to use that into your advantage. Also there aren't that many trendless days for CL. Even in a choppy session, the swings are fairly wide to accommodate the needs of both bulls and bears alike.

I'm not dissuading you from going live. It's your money after all. But you should be fairly confident that the results you got from the sim is replicable in real life before making a full commitment. At the very least, start out small. It's not unusual for you to lose 20-30 ticks in a matter of seconds. Were you trading 4 lots, that's $800-$1,200 instant drawdown. How many of those can you afford?

As I said in the above comment, it all comes down to two things: feel and confidence.
 
Quote from ammo:

ryhthm..sal , the traders panel of 6 or 7 on cnbc evenings, , the guy with the italian last name, i've heard he trades upwards of 60% of the volume in the oil pit, if you are trading on feel, u may have figured out his
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Yup, market rhythm plays a big factor in my PMT. It's all about swinging that hip! :D
 
Quote from schizo:

First, I believe the slippage is bigger in QM than CL. Also I've seen some sudden jerks in QM chart that were wholly absent in CL. Are they just freak accident or what?
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Yeah it's rare I get slippage on my stop market orders for 1 or 2 lots in CL, less than 10% get 1 tick slippage. Stay clear of the crude inventory #'s and you should be mostly fine.
 
Quote from EON Kid:

Yeah it's rare I get slippage on my stop market orders for 1 or 2 lots in CL, less than 10% get 1 tick slippage. Stay clear of the crude inventory #'s and you should be mostly fine.
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I've noticed that those scary moves are almost always news-driven; it can be anything, not just inventories. Seems like every bit of econ news drives a pretty sharp move in CL. The rest of the time I find CL to be one of the smoothest and most technically beautiful things to trade. The breakouts are decent, the pullbacks from new highs/lows are decent, the mid-day doldrums can be quite profitable (as my $930 simbucks demonstrated). If you jump in quick when the buyers/sellers come in at technical pivot points (S/R, LH/HL, touches to a rising or falling 20-bar MA) the trade pretty much carries you 5-10 ticks green.

I readily admit though that I sim traded ES for a long time very successfully and found it very difficult to translate my sim success into dependable live gains. I caught a few very nice moves trading ES live, but for the most part I ended up exiting trades near b/e or for very little profit, only to see a nice move continue without me. I'm a pretty impatient trader and that doesn't combine well with ES trading, except for scalping.

CL is different though, because of the speed, and the fact that even small quick moves can be pretty darn profitable. I know within a very short time if it's game over because my max stop is 20 ticks and most of the time less than that. Then I can quickly prepare for the next potential setup, and there seem to be so many opportunities throughout the day.
 
Quote from schizo:

First, I believe the slippage is bigger in QM than CL. Also I've seen some sudden jerks in QM chart that were wholly absent in CL. Are they just freak accident or what?
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QM often trades a 2-tick spread. It's arbed so heavily to CL that any errant spikes are rare... from what I've seen, mostly just data errors and not real trades.

But even for the errant spike and 2-tick spread = slippage, the QM is exactly equal to ES in trade size. One tick = $12.50 and $1 bbl is $500 contract measure.

I use a -20 cent initial CL stop or -$100 per QM contract seeking +50 cent to +100 cent profit exits. Yes the QM may slip a tick and once in awhile might get popped out on a spike. In the big picture, so what?

We're talking about deleveraging an underlying market that trades 300% to 1000% greater range relative to S&P 500 market. The CL/QM moves 50 cents, 100 cents intraday swings multiple times daily. 200 cents and 300 cents intraday ranges are common: $1,000 to $1,500 per QM contract ranges akin to 20pt ~ 30pt ES intraday ranges.

With that type of greater dynamics, which is more important? Containing slippage in ES that chops a $150 per contract total range four hours while your eyes bleed to death? Or a tad of slippage between price swings multiple times daily that any single one of can make your trading session worthwhile?

Rule #1 in trading survival is preservation of capital. That includes avoiding death by 1,000 chops. A market that only moves far enough to wipe out stops either direction and no further than that is one you cannot preserve capital within forever.
 
Quote from NoDoji:

CL is different though, because of the speed, and the fact that even small quick moves can be pretty darn profitable. I know within a very short time if it's game over because my max stop is 20 ticks and most of the time less than that. Then I can quickly prepare for the next potential setup, and there seem to be so many opportunities throughout the day.
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Okay, so live trading it shall be. We have many good traders here, including BP who we all use as contrarian indicator, to help ya out so welcome to the club! :D
 
Alright enough with the jokes. Time for some serious biz. Here's what I see down the road. Intraday-wise, well, you're on your own.

Anyone has the HOD and LOD for tomorrow they wanna share?
 

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