CL Redux
- Thread starter schizo
- Start date
It sounds like you are over thinking the fundamentals. It's easier to become a technical day trader because every day you take advantage of short term opportunities based on whatever price is doing during small time windows, with no concern about what happens in China or Ireland overnight, or whether the analysts are pumping price targets up so they can sell huge positions into strength.
I am a pure technical day trader. I've noticed there seems to be no real correlation between the fundamentals and the price of oil. Price reflects what matters: the relationship between supply and demand for the contract at a given price at this moment in time.
I trade a couple trend-following strategies: pullback entries and breakouts, very basic; and two counter-trend strategies: pure counter-trend at the extreme and first reversal signals (higher lows/lower highs/failed breakouts).
I use a 15-tick stop because it allows me to trade most of the setups in my 5-min time frame with a survivable stop. A few15-tick losses are easy to recover from, and if I have more than a few a day it means I'm violating my rules.
I use a 20-tick minimum target because that ensures I have a positive reward:risk ratio. It's a soft target because often the market will offer more. Today, for example the market offered a LOT more than I expected.
Bluestreak,
Listen, there's nobody who bitched more about the financial journalists than me. Put it bluntly, those media whores you allude to are a bunch of (fill-in-the-blank) who conveniently regurgitate the same old stories time after time. Thank god, they label themselves as analysts and not gurus, for their worthless reports always appear so timely in hindsight.
Ya don't need "5 days" to cook up a mesmerizing story, however twisted it may be. You could have two conflicting stories within the same day. The market could tank in the morning on Irish default news and then rally in the afternoon on QE2 news. One of my all-time favorites is that all the economic numbers came in worst than expected and yet the market rallies and the news comes out stating that the market is in a rally mode because all bad news is good news when you have the Helicopter Ben under your wings, especially with the interest rates hovering at (you guessed it) 0%.
Just turn off the damn TV and don't read any news other than skim the major headlines. Most of them are outright contradiction and they certainly don't help you become a better trader.
Listen, there's nobody who bitched more about the financial journalists than me. Put it bluntly, those media whores you allude to are a bunch of (fill-in-the-blank) who conveniently regurgitate the same old stories time after time. Thank god, they label themselves as analysts and not gurus, for their worthless reports always appear so timely in hindsight.
Ya don't need "5 days" to cook up a mesmerizing story, however twisted it may be. You could have two conflicting stories within the same day. The market could tank in the morning on Irish default news and then rally in the afternoon on QE2 news. One of my all-time favorites is that all the economic numbers came in worst than expected and yet the market rallies and the news comes out stating that the market is in a rally mode because all bad news is good news when you have the Helicopter Ben under your wings, especially with the interest rates hovering at (you guessed it) 0%.
Just turn off the damn TV and don't read any news other than skim the major headlines. Most of them are outright contradiction and they certainly don't help you become a better trader.
Yeah, just has been a frustrating 4 days of trading for me:
For example, I analized the prvious reports and reached the conclusion that we would have another bullish inventory report because of several factors, so went long into the report, got the report i was wanting, couldn`t of asked for a better report, nice reaction, and boom I knew there were a lot of shorts, but I expected it to break out it stalled, so ok....we are going to retrace.....but here is the history getting in the way....there was an exact report situation similar to this about 6 weeks ago, and boom we spiked, and retraced all the way back, went even lower by 35 cents, and then took off slowly, and gained speed, and 2 dollars plus later...i was feeling bad because I took a quick profit and got sheken out of what was a bullish report......not going to let that happen.................and boom..................zigged when I should have zagged, and vice versa...
It is apparent after the fact that there are some huge positions in crude and when somebody predetermines that they are selling it takes several days to unwind, and this one was in the system, and unless Israel attacked Iran....this thing was predetermined to go dowm.....the inventory report was just a slight interruption of the pre=ordained orders already in the system for who knows how long.
But I like the stories that are being shared with Sharon Eperson on the pit floor: That is quite creative, that california uses more oil then china---------and we actually have half a year`s supply of oil..................where were these same folks when i had to take a loss on some shorts last week at what I thought were very reasonable risk reward levels.........i didn`t get out of them because I had to.................the market just wouldn`t go down 30 cents, and it looked like maybe this time is different, maybe we really are going to a 100 in another month, and with what was turning out to be even more bullish fundamentals----it seemed rational at the time..............would have made a nice bit on those same positions.
it is also amazing how sharon was bringing up lack of demand, heck....demand is a lot better than it was 6 weeks ago, 4 weeks ago, even last week...it has been trending slightly up but with an upward trend from the doldrums of the summer where we were threatening a double dip with poor econ reports, but the point is....nobody was talking about demand when oil was 88, it is only after everybody is short, that now they start talking their book about "lack of demand"!
Its sort of like poker sometimes, where previous hand history gets in the way of reads, todays market read didn`t take into acount the most important variables of contract rollover, and huge sell positions in the pipe line.
For example, I analized the prvious reports and reached the conclusion that we would have another bullish inventory report because of several factors, so went long into the report, got the report i was wanting, couldn`t of asked for a better report, nice reaction, and boom I knew there were a lot of shorts, but I expected it to break out it stalled, so ok....we are going to retrace.....but here is the history getting in the way....there was an exact report situation similar to this about 6 weeks ago, and boom we spiked, and retraced all the way back, went even lower by 35 cents, and then took off slowly, and gained speed, and 2 dollars plus later...i was feeling bad because I took a quick profit and got sheken out of what was a bullish report......not going to let that happen.................and boom..................zigged when I should have zagged, and vice versa...
It is apparent after the fact that there are some huge positions in crude and when somebody predetermines that they are selling it takes several days to unwind, and this one was in the system, and unless Israel attacked Iran....this thing was predetermined to go dowm.....the inventory report was just a slight interruption of the pre=ordained orders already in the system for who knows how long.
But I like the stories that are being shared with Sharon Eperson on the pit floor: That is quite creative, that california uses more oil then china---------and we actually have half a year`s supply of oil..................where were these same folks when i had to take a loss on some shorts last week at what I thought were very reasonable risk reward levels.........i didn`t get out of them because I had to.................the market just wouldn`t go down 30 cents, and it looked like maybe this time is different, maybe we really are going to a 100 in another month, and with what was turning out to be even more bullish fundamentals----it seemed rational at the time..............would have made a nice bit on those same positions.
it is also amazing how sharon was bringing up lack of demand, heck....demand is a lot better than it was 6 weeks ago, 4 weeks ago, even last week...it has been trending slightly up but with an upward trend from the doldrums of the summer where we were threatening a double dip with poor econ reports, but the point is....nobody was talking about demand when oil was 88, it is only after everybody is short, that now they start talking their book about "lack of demand"!
Its sort of like poker sometimes, where previous hand history gets in the way of reads, todays market read didn`t take into acount the most important variables of contract rollover, and huge sell positions in the pipe line.
soon as you stop making that herd mistake and turn 100% attention to what the charts are telling you to do, that is the very day you will leave the frustrations behind
retail masses traders try to use logic & reason for trading as a shortcut to success.
retail masses traders are mostly net-loss donors who never make one dime in trading
see any correlation there?
attention to what the charts are telling you to do
Its not exactly that simplistic: For example CL is in a nice uptrend at the open tonight: do you take a nice profit, or do you wait for a trendline break? What constitutes a trendline break? The only way you know you have made the correct decision is after the fact.
The option: take 50 cent plus profit per contract now, or wait til trend line break and risk giving up 5-15 points depending upon your definition of trendline break, or hold for a bigger ride and risk a larger pullback but stay with the trend for longer in case the move is a 100 plus points tonight, etc...............this is one example where the charts only tell you what to do after the fact..............everyday there are many setups that have many trade management decisions/choices that have to be made for how a given setup will play out, and sometimes the market does one thing, and the next time it does the exact opposite............and the charts only confirm which was the correct choice after the fact, i.e., you move your stop to break even because the charts are telling you one thing, and boom, after the fact, that choice cost you 2 bucks on the trade, etc....
Its not exactly that simplistic: For example CL is in a nice uptrend at the open tonight: do you take a nice profit, or do you wait for a trendline break? What constitutes a trendline break? The only way you know you have made the correct decision is after the fact.
The option: take 50 cent plus profit per contract now, or wait til trend line break and risk giving up 5-15 points depending upon your definition of trendline break, or hold for a bigger ride and risk a larger pullback but stay with the trend for longer in case the move is a 100 plus points tonight, etc...............this is one example where the charts only tell you what to do after the fact..............everyday there are many setups that have many trade management decisions/choices that have to be made for how a given setup will play out, and sometimes the market does one thing, and the next time it does the exact opposite............and the charts only confirm which was the correct choice after the fact, i.e., you move your stop to break even because the charts are telling you one thing, and boom, after the fact, that choice cost you 2 bucks on the trade, etc....
no one ever succeeded on a long-term basis trying to micro-manage every single trade via logic & reason
the only way to succeed long-term is take a large sample size of similar trades, manage them in similar fashion and let the profits exceed losses. methodical or systematic, that's it
a straight road to failure and ruin is trying to "figure out" which way any market should go every single time = how to manage this specific trade every single time
trades are taken for some similar set of circumstance, i.e. chart setups, whatever.
trades are all managed without (too much) emotion. some will work some won't. some will almost reach minimal profit and turn right around to stop at par or loss.
that's the way this game plays. there is no other way to play it and prevail. temptations to use logic & reason as a tradable edge is the absolute ruin for just about everyone who washes out of trading
covered 1 at 81.45
Great posts BS you sound like I did a couple months ago when there was enough oil to fill the pacific ocean but the fing price kept climbing. I constantly battle to put fundamentals on the back burner and use all these nonesensical reports as a catalyst for vol. The only way I eek out any sort of existence from this pos is by scaling and pyramiding. I don't have the attention span of Nod so it would be impossible for some like me to trade like that. Trade small!!! I keep 100k account and I just schlep around 3 or 6 QMs.