Quote from macattack:
How do you enter & exit your trades on a day like today? Do you enter on sell stops? Use a bracket for a stop & target? Do you trail a stop? Do you just keep targeting the same amount on each trade..................if so, what target amount did you use today? Do you ever exit early for some reason, or do you just stick with a stop & a target & let it go? Etc, etc, etc. 
I'm asking because trend days seems to be my arch nemesis when they should be the opposite. I had 3 shorts today that should have been nice winners, but as soon as price paused my mind thought trap & stop-run, & I got out with nothing. So used to being burned. When I force myself to go with the trend it ends immediately. When I decide to skip the with-trend trades the trend just goes on & on.
If you're used to being burned, then that would indicate you don't have a well-researched positive expectancy trading plan. Can you share your 3 shorts, and the reason for entry?
I'll share my reasoning:
I have a fully defined trading plan for CL, meaning I have specific descriptions of setups (price action patterns) and context (the price action environment required to validate the setup), as well as minimum risk:reward criteria and how to calculate it using price levels derived from the technical analysis of price action in each type of price action environment validated by my plan. Finally, I have rules for when to place a fixed profit target and when to use a flexible profit target, and how to manage the trade when a flexible profit target is indicated.
This plan is my foundation and I know with certainty that if I follow it and avoid any trading that runs counter to my plan, I will end the day with a profit (barring factors beyond my control such as a black swan event or hardware/software failures).
I cannot emphasize strongly enough the importance of this level of certainty in a work environment where the outcome of any individual trade is uncertain.
Friday, the downside break (my first setup) of a pre-market symmetrical triangle (the price action environment) at 8:15am ET provided my first trade signal. The pullback to the lower trend line (LTL) at 8:24 and 8:25am was my entry zone. My plan allows me to enter with a sell stop or to place a limit order at a key pullback level. As long as my R:R criteria are met, it doesnât matter which method I use to enter. In this case the sell stop entry price and the limit order entry price were only a couple ticks apart, so it didn't matter. My minimum profit target is .20 unless thereâs a technically valid reason to expect more. With the round number (95.00) being a common defense zone, I chose to use a flexible profit target, but was prepared to exit somewhere in the +.20 region.
My 2nd and 3rd trades were scratched because the evolving price action following my entry invalidated the acceptable R:R. Here are the trades and the reason for scratching them:
Trade 2: Short @ 95.20, pullback to the 8:16/8:17am low of 95.22 (prev S becomes R in a down trend). Sellers were not too plentiful following my entry, resulting in a lack of downside momentum. An upside break of the 8:50 5-min bar would likely result in a deeper pullback to the 5-min 20EMA, so I moved my buy stop to that level for a break even exit because the odds of price hitting my max loss before reaching my minimum profit target would be extremely high if that 5-min bar broke upside.
Trade 3: Short @ 95.20, following a double test of the 1-min 20EMA between 9:19 and 9:21am. This was a purely discretionary trade, not part of my plan (flat 20EMAs in 5-min and 1-min charts indicate a price action environment commonly known as range/chop), and I scratched the trade when price simply consolidated for the next few minutes instead of breaking down. You see, price had moved up off a previous low (95.11) effectively establishing an internal double bottom range low and the odds of price hitting my max loss (which was well inside the range high) increased tremendously when price consolidated instead of gaining downside momentum. NOTE: In a strong trend, consolidation is fine and I would've had no reason to exit.
So even in a situation where I traded outside my plan, I remained aware of what I saw (consolidation) and discarded what I thought (looks kind of weak and since Iâm short it must be headed lower...LOL).
Trade 4: At this point, there was still a lot of hope for bottom fishing longs. Price had dropped over 5 points from the 12/27 highs and it appeared that the 95.00 zone was acting as a base for a possible trend reversal, considering price started to move back up off a slightly higher low. A clearance of that 95.40 swing high would be reason to start looking for long entries, because that would also break the upper trend line (UTL) of the new symmetrical triangle (which was around 95.35 at that point).
That UTL was a key level for me. I watch for 1-2-3 setups (look up Trader Vic 1-2-3) on the 1-min chart around key levels and as long as Iâm not fighting a longer term (60-min chart) trend, itâs a valid early entry setup. So Trade 4 was a short @ 95.29 off the UTL resistance zone, targeting at minimum a test of the LOD. The LTL broke only slightly, but by then the UTL was inside my entry price, so I moved my stop loss to break even. The UTL held, price broke the LOD, but the break was very weak, so I quickly moved my stop to lock in .20, but it wasnât hit. I had a lower parallel channel line drawn that was around 94.85 at that point, and I exited when price stalled around that level.
At this point the price action environment was a well-defined strong trend. The downside break of the âhopeful bottom fishersâ symmetrical triangle" occurred with pure conviction.
This is my favorite environment to trade and I aggressively trade every pullback that allows for a stop loss of .15 or less. I wonât reveal my details for how I enter and how I calculate technically survivable stop losses because thatâs my proprietary trading plan I spent hundreds of hours on. I trade Volmanâs price action setups and a few of my own, so this stuff is available to everyone for the cost of a book.
If anyone can find a technically valid reason to go long crude oil yesterday after 10:15am ET, Iâd love to hear your thesis.
