FirstDegree and Crude Oil

Today was just a weird day. Lots of back and forth, lots of range, lots of tails on the candles, all of which made me hesitate and confuse myself even though there were some great signals.

I ended up with 0 trades again today. Maybe I should go back to sim trading and just take the dang trades, but I need to really get over this hurdle of hesitating and waiting and watching the patterns and price do exactly what they are designed to do. You would think that with the amount of trades that I miss out on and watch them go to a nice profit that I'd start getting the hint, but I'm still doubting myself that "this one will not work." It's a bad psychological cycle to be in.

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Trade A: This looks like a good signal. It tries to break through the EMA, but fails as sellers step in. This could also be an area of profit taking after a strong run up. It also made a double top that seemed to make the signal much more valid. I actually was away from my computer at this time and missed the signal. I have a hard time saying I wouldn't have taken this trade. It's a good thing I was away at the time. I'm not sure what I would have done if I was in the mindset of taking all of my trades and was actually here to take that trade.

Trade B: This looked like a good signal. Strong run up, pull back near the EMA, possible continuation. I put on a buy stop, but it went the other way so I canceled the order.

Trade C: This appeared like it was another good signal. During the time that the bar was open it came down and tested the breakout area and turned back up. I thought about taking this trade, but as soon as the bar closed it started to pop up. I like the trades that wait a few seconds before making its move, as if it's piling on a few more people to make a move.

Trade D: This was a nice signal. Strong move down, lower low, failure to continue upwards to a lower high. I missed it, I second guessed myself. Would have been good for my profit target.

Trade E: I added in the channel lines, which made E a great trade. It came down and hit the lower channel line causing an "overshoot" and failed breakout. This would have been counter trend, but it would be suspect of a reversal coming and being a green bar made it that much better. It would have went to full target.

Trade F: In relation to the previous bar, it wanted to make a continued move upwards, but failed. Sellers stepped back in to create a pullback and a continuation downwards. Another great trade, in my opinion. I really like when you get the hammer/shooting star back to back when it's a valid signal.

Today just confused the heck out of me so I was much more hesitant to take trades in comparison to Tuesday and Wednesday. The last three trades were really nice and I really should have taken them. I am going to be conservatively honest and say I probably wouldn't have taken Trade E as it was more counter trend.

Total: -15.5
mTotal: +63

The Black Swan by Nassim Nicholas Taleb:

"We grossly overestimate the length of the effect of misfortune on our lives. You think that the loss of your fortune or current position will be devastating, but you are probably wrong. More likely, you will adapt to anything, as you probably did after past misfortunes. You may feel a sting, but it will not be as bad as you expect."
 

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No trades again today. No clear signals. I was in the mindset that I was going to take clean, valid signals, but I did not see any that jumped out at me.

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Trade A: This one made me think, but it wasn't as clear. The previous bar had the look of a short signal, so we would look for a move lower. Then A comes along, attempts to go lower, but buyers step back in making a bar that looks like a reversal, probably going for a second leg pullback. Would have been a good trade, but wasn't as clear so it's one of those times I need to learn how to flip my bias quickly.

Trade B: Watching this set up in real time, it had the look that it wanted to go higher, but then before it closed it had the look that it wanted to go lower. It also closed below and rejected the EMA. The previous bars were very back and forth rangy so I just stayed away. It would have only been good for a BE or maybe getting out early since it seemed to stall when it was at its lows.

Trade C: Move down, pullback to the EMA, rejecting off the EMA. Looked like it wanted to go lower, but wasn't as clear either with the bottom shadow on the candle and with a strong move back to the EMA. The candle looked too much like a large(r) doji and that there was not a real change of direction here. It had the feel of, "It has the look of a signal, but I have some doubts on what is going on here."

Yesterday's signals were much more clear and easier to trade (if I could just pull the dang trigger!)

Overall, nothing really to report here. My focus was much better today. I wasn't too distracted with other things going on around me - or with the internet, which is sometimes my biggest form of distraction.

Week Total: -15.5
Week mTotal: +63

Moral of the Story: Take your trades and let the probabilities work themselves out.

Mark Douglas says in his Five Fundamental Truths (and I'm writing this from memory):

"3. There is a random distribution between wins and losses for any given set of variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another."

and in his Seven Principles of Consistency he states:

"4. I act on my edges without reservation or hesitation."

In an attempt to make his Five Fundamental Truths and his Seven Principles of Consistency a part of my belief system, on my 3rd read-through, I memorized both.

Hope everyone has a good weekend!

The Black Swan:

"...we have psychological and intellectual difficulties with trial and error, and with accepting that series of small failures are necessary in life. My colleague Mark Spitznagel understood that we humans have a mental hang-up about failures: 'You need to love to lose' was his motto."

**The attachments that are a part of these posts are just the charts above. I have found that I can use these as my files for my images.
 

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Quote from FirstDegree:

**I can honestly say that my trading would not be where it's at today without the help from NoDoji. Thanks again!**
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You're welcome!

OK, how is it you started a journal and I didn't even know it until now? How is this possible? :D

Quote from FirstDegree:

Trade 3: Short at 83.06. For some reason I kept having this idea that price was too high and there was going to be some kind of pullback to the EMA. I had a short-bias. I kept looking for some kind of weak, failed break out. The one red bar felt like it was getting weak and so I entered on 1 tick below the low only to have it turn around against me immediately. Yes, I sold that bottom tick. In hindsight it actually looks like a good long trade, but with my short-bias I failed to see that.
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That is a counter-trend setup I often take, and I've sold low ticks on 1-tick failed breakouts (and bought high ticks as well) and it's best to wear it as a badge of honor and have a good laugh about it :p

When that happens on a counter-trend trade, think of all the traders trapped there and look to quickly play a break through the other side of the signal bar. So if you shorted that low tick and you're stopped out, look to reverse upon a break of that signal bar's high. These traps are good setups and you should recover the loss.

Have a good weekend, it's off to futbol for me now!
 
Quote from NoDoji:

You're welcome!

OK, how is it you started a journal and I didn't even know it until now? How is this possible? :D



That is a counter-trend setup I often take, and I've sold low ticks on 1-tick failed breakouts (and bought high ticks as well) and it's best to wear it as a badge of honor and have a good laugh about it :p

When that happens on a counter-trend trade, think of all the traders trapped there and look to quickly play a break through the other side of the signal bar. So if you shorted that low tick and you're stopped out, look to reverse upon a break of that signal bar's high. These traps are good setups and you should recover the loss.

Have a good weekend, it's off to futbol for me now!
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I'm not sure how you missed it. I assumed you knew. I decided it might be a good idea to have a more open account of my trading rather than just having a private journal that hasn't really been feeling like it is benefiting me.

It's funny because I will look back at my first chart in this journal and then the charts after and the live trades I took look so bad, but the trades I didn't take that did very well after the fact look so much more clean. My running totals only prove the reality.

I have to work on not taking my mind out of the market after taking a losing trade because sometimes the opposite trade ends up being the correct trade, as is the case of the trade you were referring to.

I need to start taking the signals and not worrying about taking a loss. I'm working on trusting the probabilities and trusting myself. I think as soon as I am able to condition myself to being in trades and how to manage them I won't have any problems.
 
Quote from FirstDegree:

I need to start taking the signals and not worrying about taking a loss. I'm working on trusting the probabilities and trusting myself. I think as soon as I am able to condition myself to being in trades and how to manage them I won't have any problems.
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The taste of a runner will help a lot. I'm sure you think I'm nuts for letting so many trades run almost 20 ticks in my favor and stop out b/e, but you'll understand why after you experience a few trades of 30-, 40-, 50-ticks or more, or after you exit a trade for a small profit and watch price run a point further.

When you see a potential setup forming, choose the expected profit target zone (new high, new low or other side of the range/channel) and patiently let it get there unless you get a strong reversal signal.
 
Trading crude oil is about the money picked from the other guys pockets. The inventory numbers are absolutely useless for traders. I ask a simple question; What freaking good is a report that says there are 500k less barrels around? Anyone worth their salt will laugh when CL goes up or down on such a silly report.

The front month is NOT where the hedgers are, the average daily volume in crude is approx what? 300K That in and itself tells you the contract is about day-traders more than anything else, that's a good thing. The bad thing is, as mentioned, the hedgers (commercials) are not there.

Crude oil can be hedged out for a few years but in actual practice it is not really done so as in the past. The users of gas, diesel, etc have resorted to passing on their high costs of fuel to the enduser instead of gambling in the CL contract to hedge. Ask yourself, how could you possibly manage a hedge out forward about a year or so with todays crude prices flopping around like a fish out of water. Good LUCK with that because LUCK is all you can hang your hat on. Many users of CL products add on a FUEL SURCHARGE to the bill to cover their fuel nutso buying instead of hedging a gamble. The other day i sent out a package that cost $12.02 with United Parcel Service (great UNION company, TEAMSTERS), anyway in that billing was a fuel surcharge for $.67 . Who needs to hedge fuel costs when the customer picks up the tab?

More to the point, trading CL today (unless you are a blond chick) is a gamble, nothing different than what trading pork bellies was in days gone bye. Many youngins will not understand what i mean by that. A quick history lesson: Back before the financial futures came along (stock index, interest rates, currency futures, etc) the futures exchanges were "AG" mkts, grains, meats etc. The grains and other meats besides pork bellies were mostly commercial mkts to hedge your products etc.

Pork bellies became the playground of the specs to play their games, and, play they did. Back a few decades when the dollar was worth about 10 times what it is worth now (SIC), a couple cents move in bellies was just as large then as a couple dollar move in CL is today. LET that sink in a moment, a penny move in PB back then was worth $400 in purchasing power. To get that kind of purchasing power in a move in todays CL mkt........well you do the math, it speaks for itself.

What we see today in CL today is the specs have moved to a rather low volume contract powered by a handful of large specs that can and will play havoc for the unsuspecting new comers............just like they did in the PB pit in days gone bye. Same game, different contract, different time.

Example of purchasing power back in pork bellie trading days and CL trading now. Back then to trade your way to a new Chevy in 1965 you needed to extract 8 to 9 cents (not counting taxes in either contract) trading bellies, a new Chevy cost approx $3,400 HUNDRED dollars. Ok, today a new Chevy costs about 10 times that, so in CL the trader would need to ..............well, you get the picture.

If the CL daytraders really wanted to juice up their game ........they could all swing over to NAT GAS futures, or maybe ring up the LUMBER pit . HAA!!! :eek:
 
imo crude oil futures are best traded seeking +50 cent to +100 cent or +200 cent profit objectives. CL is definitely not a place to try "scalping" for success, but then again scalping is a fool's folly and almost certain path to ruin

good news is, crude oil remains unfettered by whatever force(s) have currently destroyed emini trading for the time being. CL continues to make normal, historical price swings multiple times daily that current emini markets cannot even dream about right now.

fact: the world does not need an S&P index to function normally without a hitch. can the same be said for crude?

hence the current absence of players in S&P while the Crude Oil futures world keeps rolling as always :cool:
 
I beg your pardon!!!!

No one said CL was not a good instrument for day trading at the moment. Quite the contrary. Just pointed out the historical situation at times. Also was being honest in calling the CL pit as i see it, controlled by a few large specs that trade in their own style. Compared to PB back when they were where the action was........CL is nothing compared to the purchasing power of the dollar today. No one can deny that a $400 dollar move for a penny is far more sexy than a $4,000 move for a whole 4 dollars. CL loses that contest hands down.

The stock index futures are dead? What freaking planet are you from?
A quick review of last weeks daily volume in ES...
Monday = 1,463,358 cars traded
Tuesday= 3,055,906
Weds = 2,287,491
Thurs = 2,407,311
Friday = 1,204,824

CL is NOT a good trader compared to the stock index futures. The technicals in CL are NOT nearly as CLEAN as in index futs, that's a fact. Another fact, as explained is that the commercials are not in CL, thus it is a playpen for large specs.......

I an not selling anything, do not need to, just calling them as i see them.

No tit for tat either.......i am again out, i am ashamed i even made 2 posts today in ET..........SHAME ON ME. :D :D

PS: Austin, please tell everyone how you set a STOP LOSS in CL when shooting for those 100 and 200 cent profit targets. HA, Lots of luck with that one. :D

I am done, no more replys. Have a Merry Christmas !!!
 
Not really sure what to take out of these last few posts from you guys as I can't decide if what you're saying is that I should not trade CL and/or I won't have a chance at success.

The patterns I look for in CL are of their own breed. I completely understand that the technicals of CL are not "that" good in comparison to ES. I think they trade in their own way. CL is a bar-by-bar instrument. You can take a look at the entire picture, but it really only reacts to more extreme levels. For someone who just doesn't believe in CL, I have to say that they probably don't understand it. It's not like taking any strategy and just dumping it onto Crude Oil. You have to find what works and adapt a strategy to its behavior and characteristics.

ES, on the other hand, seems to work in step with each and every support and resistance and works in waves. ES is more of a support and resistance instrument.

I started off with ES and then switched to CL. Then looking back at the ES and being a promoter of Al Brooks, I couldn't see the bars in ES the same as I was with CL. Then over time after talking to another very incredible trading genius and just listening to him talk, I've slowly began to see the fluidity of ES. You can't look at ES and trade each bar, at least, in my opinion.

I am working on my exits of my strategy. I know a 1:1 R:R seems maddening, and maybe my reasoning for why I do it is wrong, but sometimes I feel like I'm clawing my way back to breakeven to take some pressure off of me. My goal right now is to get back to breakeven and I felt like taking little chunks was the way to go. I have no doubts that I will be successful, but I am in no way delusional. I'm probably working hard at this more than the majority of those on this website. I look forward to the days where I can put my mind on cruise control and just take signal after signal letting the market dump money into my pocket.
 
Great post all the way up to the last line. I have yet to meet one who has achieved, you may be the first! GL!

Quote from FirstDegree:

Not really sure what to take out of these last few posts from you guys as I can't decide if what you're saying is that I should not trade CL and/or I won't have a chance at success.

The patterns I look for in CL are of their own breed. I completely understand that the technicals of CL are not "that" good in comparison to ES. I think they trade in their own way. CL is a bar-by-bar instrument. You can take a look at the entire picture, but it really only reacts to more extreme levels. For someone who just doesn't believe in CL, I have to say that they probably don't understand it. It's not like taking any strategy and just dumping it onto Crude Oil. You have to find what works and adapt a strategy to its behavior and characteristics.

ES, on the other hand, seems to work in step with each and every support and resistance and works in waves. ES is more of a support and resistance instrument.

I started off with ES and then switched to CL. Then looking back at the ES and being a promoter of Al Brooks, I couldn't see the bars in ES the same as I was with CL. Then over time after talking to another very incredible trading genius and just listening to him talk, I've slowly began to see the fluidity of ES. You can't look at ES and trade each bar, at least, in my opinion.

I am working on my exits of my strategy. I know a 1:1 R:R seems maddening, and maybe my reasoning for why I do it is wrong, but sometimes I feel like I'm clawing my way back to breakeven to take some pressure off of me. My goal right now is to get back to breakeven and I felt like taking little chunks was the way to go. I have no doubts that I will be successful, but I am in no way delusional. I'm probably working hard at this more than the majority of those on this website. I look forward to the days where I can put my mind on cruise control and just take signal after signal letting the market dump money into my pocket.
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