CL Redux

Quote from NoDoji:


I'm under the impression (correct me if I'm wrong) that you, on the other hand, are still in the early learning phases of mastering this level of professionalism.
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Actually I've long since passed this level of professionalism, but I do feel tremendous remorse and guilt for the pain I caused my relatives and friends who lost everything supporting my no stops trading style. Grandpa's exact comments to Grandma were, "I told you the boy had no talent for the markets. Now what do we do?" To which Grandma replied, "But he was dong so well." .............................:p ...........................(This is a joke :))


Quote from NoDoji:
Don't misconstrue my criticism here, but you're being very evasive. You're assuming that because oil was in a strong uptrend, the pullback was going to be all nice and "resistance becomes support at the rising 20-period exponential moving average while Mr. Bollinger dances the contango through the shadow of the valley of MACD" perfect, and run right on up to your profit target without a glitch.

My question is, if you averaged down and price suddenly started falling out of nowhere, crashing through one support level after another for no apparent reason, where was your stop? :D
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Actually, as I mentioned, I wouldn't have actually averaged down with a real trade. And on further reflection on the original 87.41 reentry after the +30 tick profit to 87.44, I may have taken a small 5 tick or so profit or even exited b/e as it seemed to stall out there before the Fed announcement, which as I mentioned I would have been flat preceding it. But I would have reentered after that at 87.21 and exited at 87.70 as I announced quite a while before the actual exit. And the stop for the 87.21 entry was 87 as I mentioned. If it pulled back that far I'd take that loss and reassess the action. I may have reentered around there if it seemed to stabilize with a quick trigger finger exit if it started to decline again. Maybe a 10 tick stop.

Quote from NoDoji:
For a cautionary note on being "in and out while this trade was on" and having no stop in place, I offer you a quote from this very thread back in early 2010, which I had begun following regularly while I was still sim trading CL:
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Quote from mgmaggie:

"I know, when I went to the bathroom I was only a few hundred in the red. I just didn't believe that CL would move that fast and that much. Now I am over five thousand."

That's a great quote. Poor baby. Trading lessons can be rough. :) I wouldn't actually go off to do something else without a stop in place if I had a real money trade on. I would never, ever do that. And don't you do that either you lurkers. :) I've been at this a long time cumulatively now. The reason I'm sim trading is I've been waiting for my account to get funded. I spent 2 hours on the phone this morning with my bank clearing up a matter that was preventing my wire from going out. But I will only trade one CL contract at a time until I learn these contracts better, or possibly 2 QM's.
 
Quote from NoDoji:

Haha, I can't believe all the trouble I went through trading this simple long move, 4 trades, and I could've had 10 extra ticks and 3 less RT commissions, just holding the initial position that I was stopped out of b/e TO THE TICK, (bastards).
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Well, if you held for 20 minutes, that tick would have been lost to contango... yesterday front month CL went down by 500 dollars relative to next month (during the 18 hours from 6 AM until midnight EST). That is -30% per year, meaning that at this rate USO will go down to 0.0001 in just over 3 years. $2200 of guaranteed loss per 1 CL lot every month... (vs. $50 in Brent crude). I do hope that I was wrong about this being Fed's new sterilization device... but they wouldn't tell us with crude unlike with Treasuries - after all they are exporting the inflationary burden to Europe (by hedging with Brent) and taking money from long-term investors (incl. pension funds holding USO and hedge funds) by trading calendars. Hope I'm badly wrong on Fed's involvement here and the downward pressure on front-month will eventually stop once the iceberg(s) are done. Before we have widescale blowups of convergence traders (LTCM II anyone?:)
 
Quote from NoDoji:

Well, you know, with my nearly 10,000 hours of screen time, I'm a seasoned professional now, which means I can trade without stops and average into losers until my family and friends have all thrown themselves in front of trains or off bridges.

I'm under the impression (correct me if I'm wrong) that you, on the other hand, are still in the early learning phases of mastering this level of professionalism.
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Are you in effect saying that one of the critical success factors is the Staying Power? Leaving stops aside for a while (and their true meaning: leverage), would you advocate scaling in at all (either down OR UP)? Always trading constant investment-sized position you would be comfortable with in the long term? Is that constant size trading due to the fact that no money management tricks can add any meaningful value to traders with such exceptional market timing skills as yours?
 
Quote from McBet:

Are you in effect saying that one of the critical success factors is the Staying Power? Leaving stops aside for a while (and their true meaning: leverage), would you advocate scaling in at all (either down OR UP)? Always trading constant investment-sized position you would be comfortable with in the long term? Is that constant size trading due to the fact that no money management tricks can add any meaningful value to traders with such exceptional market timing skills as yours?
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I think scaling in and out is a great strategy, but I prefer to trade all-in/all-out because I trade the individual price swings. For example, in yesterday's move up I had several long trades, but in between, I had a short trade. If I'd been scaling in and out, long-only, I would've been reducing part of the position on the failure to reach the initial high of the day, and possibly scaling back in to the long on the pullback to the moving average. Instead I was exiting on the failure and reversing to a short position for the pullback (just in case it decided to retrace the entire move up, which CL often does for no particular reason).

ADD: My market timing is just the result of using technical price levels that are honored more often than not. It's a probabilities game and I try to find levels that are commonly worked. In CL these levels are very often honored to the exact tick.
 

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Quote from mgmaggie:

I know, when I went to the bathroom I was only a few hundred in the red. I just didn't believe that CL would move that fast and that much. Now I am over five thousand.
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Print and glue to wall next to computer : )

Better yet, paint it on wall. : )
 
"UPDATE 5-Brent pushes towards 2-year premium over US crude

http://af.reuters.com/article/energyOilNews/idAFL3E7CR07M20110127

According to the Energy Information Administration, stocks
at the Cushing, Oklahoma terminal rose by 862,000 barrels
week-on-week due
A) to a fall in refinery utilisation and
B) rising imports.

By 1159 GMT, the premium of Brent to U.S. crude was at
$11.22, close to its highest since January 2009 after earlier
touching $11.27.
"Brent is racing away towards $100 a barrel like there is no
tomorrow, and the Brent premium to WTI continues to widen to
unprecedented level," said Olivier Jakob, an analyst at
Petromatrix.

The front month of U.S. crude is very weak due to high
inventories at Cushing," said Christophe Barret, global oil
analyst at Credit Agricole Corporate & Investment Bank.

According to the Energy Information Administration, stocks
at the Cushing, Oklahoma terminal rose by 862,000 barrels
week-on-week due to a fall in refinery utilisation and rising
imports.
 
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