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Chart reading quandry

  #8 (permalink)

Dayton, Ohio
Trading Experience: Beginner
Platform: TOS
Favorite Futures: GC, CL, Eurodollar
Posts: 34 since Nov 2017
Thanks: 25 given, 9 received

matthew28 View Post
As soon as I read somebody is trying to scalp for five or ten cents on crude I assume they have been reading the Scalper's Journal thread and seen how easy it is to make a grand a day with the lure of a psychologically comfortable high win rate and making money almost every day. Then tried it and found it isn't quite so easy after all. Scalping can be easy for a day or two for a lot of people but trying to be consistently profitable doing it is very hard. There are always exceptions who do it well, but they will have done it enough and know their chosen instrument well enough that despite having their charts etc I suggest that they will be trading almost completely instinctually when going for such small moves, not just for when to enter but for scalping the almost more important knowing quickly when to scratch or not take the trade in the first place.

There is nothing wrong with your chart setup if you are happy with the indicators you are using. There are no special indicators that will tell you what is going to happen in the future. You just take your most educated guess/probability based theory/indicator setup, and then take the trade with an acceptable risk, acceptable even with slippage. Crude has a reputation as a trending instrument It can easily push 50-100 ticks when it gets going, and when it is being pushed the further it goes the further it wants to go, until it runs in to a big enough wall of absorption at which point the momentum traders get out and price runs the other way. It is an auction price runs from one level of liquidity to the next, with crude those areas can be far apart.

If you were trading 10-20 contracts live and it is too stressful for price to move quite normally then you are trading too large for your account. As you say you are a beginner I assume you are actually sim trading. If you are then I would respectfully suggest you cut your size down to an equivalent of what you will be able to trade when you start live. Otherwise you are just wasting time on a daydreaming computer game. If you spend a few weeks making a packet with unrealistic size then go live with one or two lots you won’t be happy making such small amounts compared to how much ”money” you were making every day in sim and unless you differ from the norm you will be doubling down and taking excess risk before you know it, followed by stress and large losses. Finding a trading method you can do calmly and realistically for a while in sim, so you trust your method and tools, and then go live and do exactly the same thing.

Thanks much for your reply. I’m trading real money, not a sim, and have a decent amount of screen time.

I struggled to figure out whether I should call myself a beginner or intermediate, but chose the more humble and accurate designationt, especially in comparison to the long-timers here.

Yes, I can see the momentum and eventual absorption (though I didn’t know those terms), so evidently those are the proper terms for the runs up or down - but am disappointed that there’s no way to sense their imminent arrival!

Do you think that some sort of depth of market indicator might be helpful to me?

Thanks again.

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