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Making a 100 a day

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Trading Experience: Intermediate
Platform: Bookmap and Jigsaw DOM
Broker/Data: Stage 5 Trading
Favorite Futures: ZN
lax99's Avatar
Posts: 433 since Jun 2015
Thanks: 623 given, 809 received

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@lax99 - can you define what "rotations" means?

I've been trading /CL, so if you wouldn't mind, please explain "rotations" in the context of crude oil.

Thank you.

Simply put, a rotation refers to up and down price movement. Have you used renko bars before? They offer a pretty easy way to describe it. You might have 5 bars up, 2 bars down, 4 bars up, 1 bar down, and so on. These are rotations in the market, as price explores higher prices, finds sellers, pushes lower, and finds buyers to drive it back up.

It is important to understand the rotations in your market in your time frame. If you trade intraday, knowing the statistically significant rotation in CL can help you determine reasonable targets and stops. Regardless of indicators or pivot points, if you've entered at $60.00, should you exit at 05? 10? Similarly, where should your stop go? 99? 80?

Imagine entering the market with a 1 tick stop and target. In this case, you're not really trading, but rather flipping a coin and seeing whether a buyer or seller will hit into you first. Now imagine entering the market with a stop aligned with the market's rotation, and a target slightly higher than 1 rotation. If you're wrong, then crude will have to move against you by a statistically significant amount to stop you out. If you're right, and the market is trending, then you'll capture a statistically significant move in crude.

FT71 has a bunch of great webinars on this site that cover this more in depth. If you're on Ninjatrader, there are some swing high/low indicators on this site that can help you collect data on rotations in your time frame.

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