CL Redux
- Thread starter schizo
- Start date
schizo, yes, I try to switch to some a little bit long-term timeframe, but I could not, I get used to that. but I used your price projection method to pindown some inflection point, very effective.
three lot at the closing, still toke profit a little bit early, very embarassed to show where I close it, get the money and get to go. have a great weekend. bt.w., I found real time Posting gave me trouble in focus.
three lot at the closing, still toke profit a little bit early, very embarassed to show where I close it, get the money and get to go. have a great weekend. bt.w., I found real time Posting gave me trouble in focus.
Quote from schizo:
After looking at the following chart, you might have a nagging doubt about the market yourself. When I saw the long tail last week, it got me all bearish. Now I ain't so sure. How do you interpret a back-to-back hanging man pattern?
There are a number of reason's way crude held up this week falling dollar, oil spill, and also today's GDP numbers. One would think the bulls should have dominated this week but they merely kept up giving you your second hanging man. I am neither bullish or bearish going into next week but I do understand there is a bearish bias so I will be paying close attention to key support/resistance areas very carefully until I get confirmation.
from 4/5, 4/14, 4/26 high, I saw breakout at 85 on 4/29. the thrust may go through 90 to 93.
from 4/19, 4/28 low, I saw a little bit up trend. it may stay a while between 82 and 87
since summer is coming, I tend to think bullish too. since I am not doing long-term trading, I may fade it at 87~88, then cover it around 83~85? I just trade 1minute intra-day chart.
from 4/19, 4/28 low, I saw a little bit up trend. it may stay a while between 82 and 87
since summer is coming, I tend to think bullish too. since I am not doing long-term trading, I may fade it at 87~88, then cover it around 83~85? I just trade 1minute intra-day chart.
Quote from schizo:
After looking at the following chart, you might have a nagging doubt about the market yourself. When I saw the long tail last week, it got me all bearish. Now I ain't so sure. How do you interpret a back-to-back hanging man pattern?
I interpret that as a lot of traders positioning themselves for a breakout, but no one wanting to be the greater fool before the weekend.
Nev, something that helped me was to start thinking of my stop loss as the cost of admission to the trade. Some trades are too expensive for me to enter, too much like playing at the $100 table instead of the $10 or $20. But when a trade is "cheap" I'm all over it. To me a CL trade is cheap when a stop can be comfortably placed at 10 ticks or less.
I'm guessing you chose to short where you did because price had already found early major resistance at 86.17, then far stronger resistance at 86.14. Your entry, although risky because of the breakout potential, made sense because 86.10 is a few ticks lower than 86.14, and you were able to place a very tight stop and you wisely placed it at (not above) the high. A nearly 100-tick move down in 20 minutes earlier in the day that pivoted at a lower low, tells us that any failure to break through 86.17 should sell off hard once again.
This is what I consider a strong "B" setup. It's counter-trend (sort of), and you're entering prior to confirmation, BUT it's cheap and offers large a reward.
So at your entry price, for only $70 risk, you have a potential reward of between $200 (a standard trend pullback to the rising 20-bar moving average) and $900 or better (test of and possible breakdown of the low).
Once price moved 10 ticks in your favor, then IMHO moving a stop to b/e on a counter-trend trade makes sense. This would've kept you in a very profitable trade. Now the even more difficult thing to do when trading only 1 lot is to let the winner run. Once price closed below the 20-bar MA (the 12:10pm bar), sit tight and target the next support level to be tested (in this case 85.49 from the 10:45am bar). Once that level is approached you have the option of taking your profits, or hanging in there as long as price doesn't break back up through the 20-bar MA.
In the 12:25pm bar price sells off the 20 MA almost to the exact tick, because once a lower high is put in and the MA is now falling, price should fail there and continue down to attempt a new low. Why does price tend to do this? Because potential buyers want a good price and will now wait for a test of the low or better before buying, previous trend followers will throw in the towel because what might have been a rally off a higher low (12:20pm bar) has failed and they know the next stop is quite likely a test of the low, conservative short sellers now have confirmation to sell short, and aggressive short sellers (that was you, in this case) will add to their winner.
I almost shorted CL at the exact same place you did there, because I saw it as a very high probability setup, but I was back and forth to my desk managing an ES trade and preparing for a band rehearsal and I felt too distracted to do 3 things at once.
CL does jump around a bit, but small losses, even two or more in a row, can be overcome quickly with one winner that you allow to play out. Yesterday my opening losses were turned into a decent gain on one trade, but I assure you it was one of the most difficult things for me to sit through the retrace to the 20-bar MA so I could allow my profit target zone to eventually be reached. The more you trade, the more trust you'll develop in your setups.
NoDoji, thank you soo much for the superb information and analysis - I am very greatful. I hope one day to contribute as much as you and continue the trading-learning process.
Another thing that made me get out soo quickly, was that the minute I got in, I already had a BUY order ready, and kept moving it down ..however at one point price just droped .08 pennies and i got filled immediately, need to work on better exit strategies and management.
This has been happening to me all week either on CL 6E or ES
.
Another thing that made me get out soo quickly, was that the minute I got in, I already had a BUY order ready, and kept moving it down ..however at one point price just droped .08 pennies and i got filled immediately, need to work on better exit strategies and management.
This has been happening to me all week either on CL 6E or ES
.