CL Redux

[Visaria]

Another excellent trading day. Glad to see so many posts on here especially since I didn't post any of my trades...

Thanks NoDoji for your answer the other day. I'm still in shock, making money every single day!!! That's just incredible. And v inspirational. More power to you!

Quote from BCE:

For those of you who have been around for awhile, Joe Battipaglia died. Not sure what happened.

http://www.marketwatch.com/story/remembering-joe-battipaglia-rip-1955-2011-2011-04-15

Sorry to hear. I recall Battipaglia's musings on the stock market for perhaps 10 years. Perma bull, always said buy stocks whenever he was on air.

RIP.

 

[NoDoji]

Quote from InvestVision:

DOJI are you serious talking about BOTS looking for these 1 or 2 CL contracts orders ?

for close to 250,000 contracts traded in a day if BOTS need to come down to get 1 or 2 contracts stops the price it has to pay may be high. In the process of getting the stops the other Smart entries may get BUY the supply at lower price ..

No, what I mean is that trading programs are programmed to try various price levels (previous bar highs/lows, previous pivot highs/lows, trend line touches, moving average touches, etc.) until they catch a level that holds. So if there's a clean channel, it's very likely that the channel lines will continue to be bought/sold until eventually there's a breakout one way or the other (today favored the bulls).

I've attached the 5-min chart with the bull flag channel. There were enough buyers at that lower TL to maintain the TL as support, at which point I imagine the majority of trend-following trading programs (those "bots") will buy until price hits the next key level, in this case the upper channel line, which held as resistance at first. Then there were enough buyers at the "second mouse" long entry level I described earlier to attract more buyers to position for a potential break of the channel (bull flag continuation breakout, the Bigsnack trade).

Notice that the touch to the lower channel line at 1:45pm ET @ 109.89 had the additional confluence of being a "previous resistance becomes support" level as well (top of the 10:55 - 11:20am range).

The chart is June contract, I updated all my charts to the new contract after the close, and the time is PT, so add 3 hours for ET.

 

[optiontimer]

Quote from optiontimer:

CL is currently at $107.84 basis June - Buy Stop $108.24, stop loss $105.88, looking for major trend to re-assert itself and price to test $120.50-$121.00

That was posted here: http://www.elitetrader.com/vb/showthread.php?s=&postid=3153237#post3153237

Currently long June $108.24 ... here is how it looks ater two days in the trade ...

 

[NoDoji]

Quote from Visaria:

Thanks NoDoji for your answer the other day. I'm still in shock, making money every single day!!! That's just incredible. And v inspirational. More power to you!

Every one of my losing days trading CL was the result of either trading against the trend or not following my trading rules. Every single losing day.

If you trade with the prevailing trend, use strong risk management and keep minimum profits at least a little larger than your average loss, it's difficult to lose money.

Bigsnack revealed the Holy Grail of profitability right here:

Quote from bigsnack:

3. Followed the rules and was all good.
5. Followed the rules and was all good.

 

[bigsnack]

Quote from NoDoji:

LOL. You know the menu that I eat from well

 

[Visaria]

Have to admit, those are excellent trading rules. I followed them today pretty religiously. It really was a good day

I noticed that days in which i lose money are trendless and small range.

 

[NoDoji]

Quote from Visaria:

I noticed that days in which i lose money are trendless and small range.

Those are good days to use smaller time frames. I often use the 1-min chart in ranges, channels and consolidation to position myself for a potential larger move.

Today, before I had to step away, I was using the 1-min chart to get positioned for a move one way or the other during the "Blah" formation.

I expected continuation to the long side, but as a day trader, I have no particular allegiance in areas where price could just as easily make a deeper pullback (or reverse the trend) as it could continue in the direction of the trend.

During that indecisive range I traded as follows (May contract, eastern time):

10:29am Long @ 108.49

10:31am Stop and reverse short @ 108.49

10:35am Stop and reverse long @ 108.47

10:40am Stopped out @ 108.48

Had to leave, thereby guaranteeing a kickass move one way or 'tother

 

[InvestVision]

this is old story April 2010 , but gives an idea how big block trades are ..

OIL Block trades:
---------------------

A sample of block trades involving 33,100 contract buy/sell spread

http://www.futuresmag.com/News/2010/4/Pages/Morgan-Stanley-agrees-to-14-million-civil-penalty.aspx

Morgan Stanley Agrees To $14 Million Civil Penalty

The CFTC orders, entered on April 29, 2009, find that, in early February 2009, a Morgan Stanley trader and a UBS broker discussed an opportunity for Morgan Stanley to act as a counterparty to a third-party UBS customer to purchase a block of March 2009 crude oil futures contracts and to sell a block of a similar quantity of April 2009 contracts on the NYMEX. The price of the two legs of the trade was to be determined later by the market closing price, an arrangement known as a TAS (Trade at Settlement) block trade.

The order finds that, on February 6, 2009, prior to the trade being finalized, the Morgan Stanley trader requested that the UBS broker not report the TAS block trade until after the close of trading.

The UBS broker agreed to this arrangement. At around mid-day on February 6, 2009, Morgan Stanley and UBS, on behalf of its customer, entered into the TAS block by which Morgan Stanley <b>purchased 33,110 March 2009 NYMEX Light Sweet Crude Oil futures contracts and sold 33,110 April 2009 NYMEX Light Sweet Crude Oil futures contracts. </b>

Per their agreement, the UBS broker then did not report the existence of the TAS block trade until 2:37 pm, after the market closed, according to the order.

The CFTC order further finds that Morgan Stanley’s and UBS’s actions concealed the occurrence of the trade from the NYMEX, contrary to NYMEX Rule 6.21C(6), which provided that the “buyer and seller must ensure that each block trade is reported to the Exchange within five minutes of the time of execution.”

 

[InvestVision]

Thanks NOD for details

this one of clean setup that SHOULD to be added to your ZIP/PDF file that was composed by one of your FAN.

Can you point me to that post where we had that PDF/zip file ...

Quote from NoDoji:

No, what I mean is that trading programs are programmed to try various price levels (previous bar highs/lows, previous pivot highs/lows, trend line touches, moving average touches, etc.) until they catch a level that holds. So if there's a clean channel, it's very likely that the channel lines will continue to be bought/sold until eventually there's a breakout one way or the other (today favored the bulls).

I've attached the 5-min chart with the bull flag channel. There were enough buyers at that lower TL to maintain the TL as support, at which point I imagine the majority of trend-following trading programs (those "bots") will buy until price hits the next key level, in this case the upper channel line, which held as resistance at first. Then there were enough buyers at the "second mouse" long entry level I described earlier to attract more buyers to position for a potential break of the channel (bull flag continuation breakout, the Bigsnack trade).

Notice that the touch to the lower channel line at 1:45pm ET @ 109.89 had the additional confluence of being a "previous resistance becomes support" level as well (top of the 10:55 - 11:20am range).

The chart is June contract, I updated all my charts to the new contract after the close, and the time is PT, so add 3 hours for ET.

 

[NoDoji]

Quote from InvestVision:

At around mid-day on February 6, 2009, Morgan Stanley and UBS, on behalf of its customer, entered into the TAS block by which Morgan Stanley <b>purchased 33,110 March 2009 NYMEX Light Sweet Crude Oil futures contracts and sold 33,110 April 2009 NYMEX Light Sweet Crude Oil futures contracts. </b>

Being a speculator, I'm all for speculation, but if Morgan Stanley (or any of us) attempt to purchase 33,110 oil futures contracts, shouldn't we have to demonstrate to the CFTC or NYMEX that we have an urgent need for that 33,110,000 barrels of oil