CL Redux

Quote from NoDoji:

Yeah, I just added stochs to my chart and saw that CL was seriously overbought around $82 early last Monday. That's where you should put on a long term short position, right? :D
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Hey Donna, I believe you use the Keltner channel. How's it working out for you? I too have the combination of Bollinger/Keltner on my charts, which I use to gauge momentum.
 
Quote from schizo:

Hey Donna, I believe you use the Keltner channel. How's it working out for you? I too have the combination of Bollinger/Keltner on my charts, which I use to gauge momentum.
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I love the Keltner channel. I also use it to gauge momentum. What I like to do is first of all determine the trend in my time frame (5-min chart, so I look at the past few hours for current intraday trend). If the 20-bar MA is rising I'm looking for long entries around the 20-bar MA and I'm targeting an upper channel line overshoot for profit taking (dev 1.0). An example of this can be found on Thursday's 5-min chart 9:35am bar. When that bar completed, it was a long signal because support was found just a few ticks below the rising 20-bar MA. If I'd been trading at that time, I'd be trailing a stop a tick or two below the low of each completed bar and when price made that momentous upper channel line overshoot during the 9:50am bar, I would've taken profits and watched for the next long entry near the 20 MA again.

When trading off a double bottom or double top (or the first lower high/higher low following a decent trend), I night take half off near the 20-bar MA if price stalls there (the previous trend might resume), but I'm actually now targeting the upper channel or lower channel line if price doesn't stall at the 20, and secondary target is a channel line overshoot.

My one trade Thursday was after the econ news. Price was choppy around the 20-bar MA, then moved down to the lower Keltner line. This caused the previously rising 20-bar MA to flatline and that signaled for me a possible counter-trend entry, which I put on when a lower high was left behind.

I was already out of the office by then, but looking at the chart, I see an exact double bottom left behind at the 11:10am bar. The next bar was a long signal and because price then sliced right through the 20-bar MA, I would've had an initial target at the upper channel line, and a secondary target at an overshoot of that upper line. That would've been a helluva trade, too!

My favorite trade is to wait for a failed retest of a channel line overshoot. That is almost always a "second mouse gets the cheese" trade :cool:
 
Quote from NoDoji:

I love the Keltner channel. I also use it to gauge momentum. What I like to do is first of all determine the trend in my time frame (5-min chart, so I look at the past few hours for current intraday trend). If the 20-bar MA is rising I'm looking for long entries around the 20-bar MA and I'm targeting an upper channel line overshoot for profit taking (dev 1.0). An example of this can be found ....
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Thanks for divulging your edge. I guess you've been hanging out with this noob for too long. :D

My use of Keltner is a bit different from yours. I overlay both Bollinger and Keltner over price. You usually have the Keltner trade within the Bollinger. In a strongly trending market, you will see the upper Kelt touching the upper Boll. By the same token, in a strong downtrend, you will see the lower Kelt hugging the lower Boll. For a pullback within a strong uptrend, it's worth paying attention to the rising lower Boll as it comes into contact with the lower Kelt keeping your eye on the distance between the two bands. Ideally, you would want to see a large gap between the two lower bands as the trend is gaining momentum but a narrower gap as the trend is decelerating. Let me also reveal a closely guarded edge of my own. As state above, you usually see the Kelt moving inside the Boll. But every once in a while, you will see the Kelt crossing above or below the Boll. In such uneventful times, watch your head because an imminent reversal is at hand.
 
Good discussion here all. I primarily trade the CL as well. Just wanted to say keep it up as there are some lurkers here.

:D

Also - pictures work great for us visual learners.
 
Quote from schizo:

Thanks for divulging your edge. I guess you've been hanging out with this noob for too long. :D

My use of Keltner is a bit different from yours. I overlay both Bollinger and Keltner over price. You usually have the Keltner trade within the Bollinger. In a strongly trending market, you will see the upper Kelt touching the upper Boll. By the same token, in a strong downtrend, you will see the lower Kelt hugging the lower Boll. For a pullback within a strong uptrend, it's worth paying attention to the rising lower Boll as it comes into contact with the lower Kelt keeping your eye on the distance between the two bands. Ideally, you would want to see a large gap between the two lower bands as the trend is gaining momentum but a narrower gap as the trend is decelerating. Let me also reveal a closely guarded edge of my own. As state above, you usually see the Kelt moving inside the Boll. But every once in a while, you will see the Kelt crossing above or below the Boll. In such uneventful times, watch your head because an imminent reversal is at hand.
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So you use keltners and bolligers to get a sense of how much volatility is coming in throughout the course of a good move? The overlay sounds interesting.
 
Quote from schizo:

Thanks for divulging your edge. I guess you've been hanging out with this noob for too long. :D
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I can't thank you enough for the Unholy Grail. I realized that although we discuss our particular edges in different ways, we pretty much trade the same.

I've given myself permission to have a much larger max daily loss and max loss per trade Monday, so I can comfortably trade 2 lots. I'm putting energy toward any rogue moves being strictly in my favor :p
 
Quote from NoDoji:

I've given myself permission to have a much larger max daily loss and max loss per trade Monday, so I can comfortably trade 2 lots. I'm putting energy toward any rogue moves being strictly in my favor :p
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If it were me, I would make two separate 1-lot trades than go in with 2-lots.
 
Quote from schizo:

If it were me, I would make two separate 1-lot trades than go in with 2-lots.
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Would you mind going into more detail regarding this statement.

thanks

Bruce
 
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