Quote from NoDoji:
From trading live for less than 2 months (but sim for several months before that), here are my insights so far:
CL trades highly technical except around news releases. So here are the high probability setups I've found:
Breakouts: Watch for a strong break out of consolidation (8:10am bar today), or a first push in a potentially new trend (same bar because of the very strong support established around 71.40-71.50). Price will pull back from the first push and then should find buyers/sellers at a higher pivot low or lower pivot high. Price resumes in the direction of the first push. Look to buy or sell at the pivot high/low. The ensuing breakout is usually good for 20-40 ticks immediately. If the breakout fails, get out quickly and re-evaluate. Failed breakouts often mean a trend reversal or a resumption of the previous trend.
Trend exhaustion counter-trend: After 3-4 pushes in a trend, an attempt to break out further often fails. You can counter-trend a strong 3rd or 4th push (9:00am bar today) with a stop at the pivot high or low. Look to take early profits on at least part of the position in case the trend resumes, because you're top/bottom picking at that point. Should be good for 20-40 ticks.
Trend reversal signal: after a 3rd or 4th push in a trend, price puts in a lower high or higher low. Short the lower high, buy the higher low, stop at the pivot high/low. This is the highest probability trade for me, along with the second and third leg of the new trend.
You'll notice that previous bar levels are usually tested to the exact tick as price moves up or down, so if you're a scalper you can skim 5-15 ticks of those little levels. I personally never do that because it's a counter-trend play and the risk:reward is minimal, as you can see from the quick move that wipe you out with slippage.
I use the Keltner bands to see overshoots more clearly. I often target an overshoot price level on trades that break down the 20-bar EMA. Very reliable zone for pivots.
