CL Redux

[Zr1Trader]

Quote from beachhouse:

I have a dream: I shorted at 104 coming Tuesday, big time, like 50 contracts, then held it until Friday when price dropped to 95. That's 9000x50=$450,000 profit.

Two things may happen in the coming week: a huge inventory build up and some glitch in Greece bailout. Don't mind CNBC highlighting banks' downgrades.

Anyone wants to make this bet, if you are tired of picking up nickles and dimes?

In 2010 I had a dream that I shorted Dow and it crashed big time netting me a large amount of money (don't know exact amount). I woke up, the next morning disappointing because the dream seemed so real at the time but wasn't. Never had a dream about a market scenario like this prior to that night.

Two weeks later, May 6th 2010, I started building a large short as the market started cracking hard past -350. I kept risk at BE or better the whole way down and just kept adding. Came out with my biggest day of my career. I pinched myself for a half hour straight after that one and called the broker worried that they would try to bust trades lol


Keep in tune with your subconscious it might lead to a good day

 

[riskaddict]

Quote from beachhouse:

I have a dream: I shorted at 104 coming Tuesday, big time, like 50 contracts, then held it until Friday when price dropped to 95. That's 9000x50=$450,000 profit.

Two things may happen in the coming week: a huge inventory build up and some glitch in Greece bailout. Don't mind CNBC highlighting banks' downgrades.

Anyone wants to make this bet, if you are tired of picking up nickles and dimes?

I would feel much better taking a swing short at 107 than here. Unless that close ends up being a failed break out. I'm so pissed I quit early Friday, I sat there forever waiting for 103.60 to be breached then when it did...

IF we get back below 103.60 quick and stay there for a day then yes all in short.

I had a dream I bought 5 KC's at 200 and rode it to 230 I think that would be good for 60k. I'm sure I'll puss out and sell everything at 210

 

[oraclewizard77]

A discussion of a scalp: ( Chart not included because maybe I have an edge. )

From Friday. Overall trend was up. However, CL price approached a resistance level and started to fall. Entered a short. Trade moved in my direction. Since I was concerned do to this being a counter trend trade I moved stop down to get me out at 3 ticks. Thought behind trade was to target around EMA and that if market was going to fall it was going to do it fast.

Got stopped out. So decided to watch market. Was able to control emotions and have patience. Price then headed back to resistance level. Price breached resistance level by 1 tick and fell back. I went long looking for a breakout. Price started to break out. I set stop below where I got short on previous trade. Stop was around 8 ticks this time. Note my standard stops are larger but I will try to adjust stops based on chart itself so stop could be much larger or smaller. If its much larger then I really entered at a bad location maybe by chasing the market. At this point, I wanted the market to pay me back for my loss plus a profit so targeted around 13 ticks which was below next resistance level. I then stepped away from my computer and took a walk so as not to have to watch the trade once I was in it. Target was hit. So far 2 trades for Friday. New goal, no more than 3 trades per day, with 1 being fine sometimes. I need to prevent over trading.

Thoughts on trades. The 1st trade even though I got in it a little late never even gave the shorts more than 10 ticks and price never even got close to the EMA showing strong bullish strength. 2nd trade shot up I believe as stop losses for the shorts were going off as price started to retrace to previous daily highs. Some retraces maybe due to profit taking but would have provided me a second chance to get long again after I was out at a profit. This should be considered if market is in a strong trend as it makes HL swings to allow one to make profitable trades more than once. However, I will need to work on watching the market after making a successful trade to look for another trade setup in the not to distance future rather than taking a break or stop trading for the day. Goal for next week to either make more profit on winning trades, or look for another similar trade for the day to get multiple winners instead of multiple losers. To prevent multiple losses I need to just stop trading after a certain number of trades.

 

[beachhouse]

Quote from riskaddict:

I would feel much better taking a swing short at 107 than here. Unless that close ends up being a failed break out. I'm so pissed I quit early Friday, I sat there forever waiting for 103.60 to be breached then when it did...

IF we get back below 103.60 quick and stay there for a day then yes all in short.

I had a dream I bought 5 KC's at 200 and rode it to 230 I think that would be good for 60k. I'm sure I'll puss out and sell everything at 210

If you wait for 107, you may miss the short train. Think about it, the only factor making oil go above this level is a mid-east crisis. So far, Syria is a no-go area, vetoed by Russia and China. Iran is too big to swallow, so US has never had a plan to attack Iran, despite Israelis' insistence. Only a few covert operations here and there.

 

[NoDoji]

Quote from beachhouse:

If you wait for 107, you may miss the short train. Think about it, the only factor making oil go above this level is a mid-east crisis. So far, Syria is a no-go area, vetoed by Russia and China. Iran is too big to swallow, so US has never had a plan to attack Iran, despite Israelis' insistence. Only a few covert operations here and there.

Monday was a confirmed channel breakout on the daily chart for a continuation run to the upside. The easy money is in the direction of the overall trend. Counter-trend trades can work, but you'll be picking up nickels and dimes, as you said earlier.

You seem to want to capture a big move with big size. I assure you from painful experience and lessons learned that counter-trend pullbacks and trend reversals send off clear signals to work with if you are patient. You won't miss anything except severe heat on your trades. If you wait for the clear signals, the psychology of the herd will be in your favor.

Even though the herd (trend-followers) offers up the prey for the predator (counter-trend trader), the successful predator doesn't just step in front of the herd looking for a meal. That would be suicide. S/he waits patiently for low risk/high reward opportunities.

In trading as in nature, the young, weak or sick (new, inexperienced or psychologically undisciplined traders) are in serious danger of being picked off at any point in time by the experienced predators.

 

[beachhouse]

Quote from NoDoji:

Monday was a confirmed channel breakout on the daily chart for a continuation run to the upside.

Disagree on 3 points:

1. Monday is a market holiday. (100% confident)

2. "confirmed" channel breakout sounds dangerous. There is NO such a thing called "confirmed" in trading, nothing is 100% in trading.

3. "channel breakout"? I may not be using your indicators, but to me, in my limited usage of technical help, in whichever time frame, oil has met resistance, several times.

Again, there is stalemate because we disagree, otherwise we see parabolic move. I see downward move, you see upward move. I can't use probability to defend a single trade, as it may very well breakout, as you said.

One thing puzzles me: you are obviously a scalper, but you constantly use longer-timeframe analysis.

 

[NoDoji]

Quote from beachhouse:

Disagree on 3 points:

1. Monday is a market holiday. (100% confident)

2. "confirmed" channel breakout sounds dangerous. There is NO such a thing called "confirmed" in trading, nothing is 100% in trading.

3. "channel breakout"? I may not be using your indicators, but to me, in my limited usage of technical help, in whichever time frame, oil has met resistance, several times.

Again, there is stalemate because we disagree, otherwise we see parabolic move. I see downward move, you see upward move. I can't use probability to defend a single trade, as it may very well breakout, as you said.

One thing puzzles me: you are obviously a scalper, but you constantly use longer-timeframe analysis.

1. Last Monday was the breakout.

2. "Confirmed" in this instance means price action confirmed direction by testing a S/R level a second time and breaking out with conviction (the initial test was a standard channel fbo.

3. I will annotate a daily chart for you so you can see what I'm talking about.

I'm an intraday scalper, so I trade both directions in my time frame, but since you appear to be looking for a larger multi-day swing move, I referred to the daily chart.

I do reference a daily chart pre-market each day to note the key S/R levels in play. In a strong intraday trend or momentum move it helps me hold for a larger target than a 20- or 30-tick scalp.

 

[NoDoji]

Quote from beachhouse:

I may not be using your indicators, but to me, in my limited usage of technical help, in whichever time frame, oil has met resistance, several times.

OK, I've annotated my daily chart to show what I meant by channel breakout. You are correct in that oil met resistance several times as it tested the upper channel/trend line (UTL) of the channel, but Monday broke out. Technicians view that move as a channel breakout or a bull flag continuation breakout as described here:

http://www.daytradingcoach.com/daytrading-technicalanalysis-course.htm#7

So if I was swing trading, I'd be long and looking for a minimum profit target of at least a measured move equal to the range of the last run up prior to the bull flag formation, which takes us to around 106.62.

 

[RichardRimes]

Quote from NoDoji:

OK, I've annotated my daily chart to show what I meant by channel breakout. You are correct in that oil met resistance several times as it tested the upper channel/trend line (UTL) of the channel, but Monday broke out. Technicians view that move as a channel breakout or a bull flag continuation breakout as described here:

http://www.daytradingcoach.com/daytrading-technicalanalysis-course.htm#7

So if I was swing trading, I'd be long and looking for a minimum profit target of at least a measured move equal to the range of the last run up prior to the bull flag formation, which takes us to around 106.62.

http://www.elitetrader.com/vb/attachment.php?

s=&postid=3452061

In looking at your chart I'm struck by the horizontal channel we have had since late November. If you draw that horizontal line at the peak(big green/red) candle roughly 103 and change..the bottom of the channel at 95 and change could you make an argument that the current 104 could be a false breakout and we could easily revert to the mean bouncing around (for a while at least) between 95 and 103?

I'm very put off by the current rise. Fundamentally it makes no sense to me. I understand the value as a political football, and market likes to manipulate. However it is a dangerous and slippery slope for the over-all economy. We can not make any progress in the economy when we are trapped by higher gas prices. It affects everything we do and buy and if oil/gas stays this high and higher economic recovery is in serious trouble.

 

[NoDoji]

Quote from RichardRimes:

In looking at your chart I'm struck by the horizontal channel we have had since late November. If you draw that horizontal line at the peak(big green/red) candle roughly 103 and change..the bottom of the channel at 95 and change could you make an argument that the current 104 could be a false breakout and we could easily revert to the mean bouncing around (for a while at least) between 95 and 103?

I'm very put off by the current rise. Fundamentally it makes no sense to me. I understand the value as a political football, and market likes to manipulate. However it is a dangerous and slippery slope for the over-all economy. We can not make any progress in the economy when we are trapped by higher gas prices. It affects everything we do and buy and if oil/gas stays this high and higher economic recovery is in serious trouble.

Regarding the technicals behind the move up, this is NOT a clean and beautiful uptrend by any means, but my personal trading plan requires me to stick with the story being told by price until that particular story is over and a new story begins. That applies for me in any time frame. Although I trade CL intraday, I swing trade stocks and I closed a long position for a 15% gain at an upper channel line about .40 from where price pivoted and recently bought again at the lower trend line, where (surprise) other buyers stepped in and have driven price up 2% from my entry in a couple days.

Regarding the fundamentals of oil, I'd love to know what percentage of the futures trading is purely speculative as opposed to hedging by actual producers and consumers (such as airlines). With enough speculators in the market, fundamentals become rather meaningless.