CL Redux

Quote from dejavu8:

only $100 single session move could kill my account, which is not likely in foreseeable future :D
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Would it take a $100 move on 1 contract, or a $100 move on 8 contracts to kill your account?

By the way, the phrase "foreseeable future" does not refer to anything based in our reality :p
 
Quote from dejavu8:

you don't need this size of account to get this calculation.
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riiiiiiight... and I read the book "Can't Lose Trading Commodities" by Robert Wiest about 25 years ago.

the easiest system in the world to create is a martingale at extreme reversion zones. anyone can do that with little effort or study

surviving the normal trend moves and occasional extremes is another story. in any event, good luck with all that :)
 
Quote from austinp:

riiiiiiight... and I read the book "Can't Lose Trading Commodities" by Robert Wiest about 25 years ago.

the easiest system in the world to create is a martingale at extreme reversion zones. anyone can do that with little effort or study

surviving the normal trend moves and occasional extremes is another story. in any event, good luck with all that :)
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Come on, Austin, don't get sarcastic with us! Price ALWAYS comes back before one's account is blown... :p
 
Quote from NoDoji:

Would it take a $100 move on 1 contract, or a $100 move on 8 contracts to kill your account?

By the way, the phrase "foreseeable future" does not refer to anything based in our reality :p
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it's really easy to avoid the negative side of this average down trick, i treat this average down thing as a gradual accumulation of a nice position in a trend reversal zone, so i won't get killed if something go beyond my strategy, that means i can cut loss at a point which is just larger than usual but definitely not more than $10.
 
Quote from NoDoji:

Come on, Austin, don't get sarcastic with us! Price ALWAYS comes back before one's account is blown... :p
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Ha-ha-ha! OMG, NoDoji you reminded me of a small stupid girl who thought to have enough balls to sit thru that carnage in summer 2008 when spot price for coal dived 20% and energy and metals stocks were having 20-30 pts moves. Yeah, the price came back 3 days later before further plunge, but the account was gone for good with that margin requirements... They always come back, lol. Good luck trading!!! :p
 
you obviously weren`t trading when the european debt crisis hit 93 to 64.....on the extremes...in what 2-3 weeks...i forget but copper went from 3.70 to 3.00......the real problem is that every strategy has negatives....the problem with reversion to the mean is that when your buying brand new market participants are coming to the part, i.e., new open interest against your direction....and you wake up with a 64 print.


and in the future we will have 13 dollar up days on a contract expiration when cl is attacking the highs when demand really is a concern and you have 200 cl calls by goldman analysts.........but i never tell other people what strategy to use............any strategy if expertly executed can manage the negatives, and be profitable in cl......there must be more successful cl strategies than one can even imagine with high frequency algos these days......but obviously we are all price takers.......and at a major disadvantage to price makers..........price makers can even get out of bad positions......you see it all the time....the smart money is expecting one data point......boom out of nowhere we get a surprise.....and after an initial reaction.....they will move in their direction...just long enough to get out and properly positioned.....i am not sure what type of money it takes to be even a minor price maker in illiquid after hours times.....but that is the place to be in cl.
 
Quote from gella:

Ha-ha-ha! OMG, NoDoji you reminded me of a small stupid girl who thought to have enough balls to sit thru that carnage in summer 2008 when spot price for coal dived 20% and energy and metals stocks were having 20-30 pts moves. Yeah, the price came back 3 days later before further plunge, but the account was gone for good with that margin requirements... They always come back, lol. Good luck trading!!! :p
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She was joking.
 
Quote from dejavu8:

it's really easy to avoid the negative side of this average down trick, i treat this average down thing as a gradual accumulation of a nice position in a trend reversal zone, so i won't get killed if something go beyond my strategy, that means i can cut loss at a point which is just larger than usual but definitely not more than $10.
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I'm extremely familiar with averaging down CL at the extremes. I started sim trading CL 6 months before I traded it live and for most of that time I traded 2 strategies: place limit orders a certain distance outside breakout levels to fade the breakouts and average down at these extremes if price kept moving.

I also had a 100% win rate.

For a long time.

Fortunately while still sim trading, I had a couple of these trades go very wrong, not to where my huge sim account was in any danger, but to the point that my live trading account would've been damaged badly. Since trading is nearly my sole source of income and I have to generate a minimum annual return of 150% on the account, I can't afford to trade that way.

But for those with a large account, it can be quite profitable.

It finally occurred to me that averaging down was only necessary when price was running against me and I had an opinion of what price was "due" for eventually. I should be trading in the direction of price, and saving counter-trend trades for specific setups/signals.

Whenever I trade a breakout and capture 20-40 ticks or more in a very short time frame, I remember my sim counter-trend strategies and how difficult I made things by trying to pick tops or bottoms instead of letting price sweep me along with it.
 
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