CL Redux

Quote from fishing:

500/day on 1 contract is pretty awesome.. anyway may i ask what kind of method are you using? i mean do you fade the quick moves or go with them? seems like its characteristic is pretty similiar to what i'm trading (eur/jpy cross) in terms of momentum..
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My favorite tactic is to sell lower highs and buy higher lows in the direction of the trend (along a rising or falling 20-bar MA).

Second favorite is the initial reversal signal. After 3 or more pushes in a trend, I look for either a hammer/inverted hammer following a climactic push up and take the side of what may become the new trend. So, short off the top - inverted hammer; long off the bottom - hammer. Another reversal signal is double top/double bottom off 3rd or more push in a trend. And of course the first lower high/higher low, though the second LH/HL is usually much better.

Breakouts in CL are excellent, especially the first and second one following a reversal into a new trend. I look to position myself 1 or 2 ticks before the S/R level is about to be tested. If price breaks out I'm immediately profitable and move my stop to b/e right away, because if the breakout's shallow and fails, price generally reverses quite hard.

As for fading a quick move, I have a rare play I do. If a 3rd breakout to the upside produces two more strong bars up from the breakout bar, then price stalls and pulls back a few ticks, I occasionally jump in short with 5 lots, looking for a 20-tick or better retrace. I've only done this twice I think, but it's incredibly and quickly profitable. I only play this trade if I catch it in time and my stop can be 7 ticks or less. Lately, the breakout bar count has only been two bars most of the time.
 
Quote from NoDoji:

My favorite tactic is to sell lower highs and buy higher lows in the direction of the trend (along a rising or falling 20-bar MA).

Second favorite is the initial reversal signal. After 3 or more pushes in a trend, I look for either a hammer/inverted hammer following a climactic push up and take the side of what may become the new trend. So, short off the top - inverted hammer; long off the bottom - hammer. Another reversal signal is double top/double bottom off 3rd or more push in a trend. And of course the first lower high/higher low, though the second LH/HL is usually much better.

Breakouts in CL are excellent, especially the first and second one following a reversal into a new trend. I look to position myself 1 or 2 ticks before the S/R level is about to be tested. If price breaks out I'm immediately profitable and move my stop to b/e right away, because if the breakout's shallow and fails, price generally reverses quite hard.

As for fading a quick move, I have a rare play I do. If a 3rd breakout to the upside produces two more strong bars up from the breakout bar, then price stalls and pulls back a few ticks, I occasionally jump in short with 5 lots, looking for a 20-tick or better retrace. I've only done this twice I think, but it's incredibly and quickly profitable. I only play this trade if I catch it in time and my stop can be 7 ticks or less. Lately, the breakout bar count has only been two bars most of the time.
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thanks for your detailed answer. :) i usually go with the trend when i feel momentum's there, but often try to catch reversal as well, thats where my prob comes from when i keep flipping long and short 2-3 times when price's stuck near top or bottom.
 
It's flat, I was expecting a breakdown from 78.92, (August Contract), but it didn't. I am done for the day. It's Friday, anything unreasonable could happen specially and Oil, so I am staying out.

Never going to forget the day of the 20 dollars up in 2008. :S
 
Quote from fishing:

thanks for your detailed answer. :) i usually go with the trend when i feel momentum's there, but often try to catch reversal as well, thats where my prob comes from when i keep flipping long and short 2-3 times when price's stuck near top or bottom.
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I do like counter-trend fades on strong moves, looking for those strong reversals. The key is to wait for at least a 3rd push in the trend. Start the fade there by waiting for at least 2 strong bars starting with the breakout bar. When the 2nd strong bar is extremely extended watch for price to stall, then jump in counter-trend. You should be able to put in a VERY tight stop. My stops on these plays are usually 5-7 ticks.

I had a couple of those plays this morning that had 4 tick stops. Beautiful R:R. One stopped out, the other moved $180 in my favor, then stopped out b/e. Kinda wish I'd taken the profit on that one, since it was counter trend, but those usually give me at least 20 ticks so I never got target there. Then I was frustrated and missed the best fade of all. Lesson: stay focused and keep playing the moves for a real reversal; you WILL catch the good one!
 
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