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High degree of confluence in CL
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Created: by GaryD Attachments:4

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High degree of confluence in CL

  #21 (permalink)
Trading Apprentice
Kuala Lumpur, Malaysia
 
Futures Experience: Intermediate
Platform: Sierra
Broker/Data: AT Infinity
Favorite Futures: Past:CL / Now:NQ
 
bwasi's Avatar
 
Posts: 29 since Nov 2009
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Quote : ""on where to take profit, and most often end up giving most of my unrealized profit back

Dunno about others, but I will exit at minimal profit using stop order at DOM when I feel the CL price stalling and tend to reverse....the price move randomly at this point and I exited with minimal profits.....of couse the feeling is subjective but visually its marked by a doji or a hammer.... .. I found the cost of commission worth it compared to the cost of anxiety. Scalping is the short word.

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  #22 (permalink)
Elite Member
New York, NY
 
Futures Experience: Intermediate
Platform: Sierra Chart, thinkorswim
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Well tonight's london session was quite nice, took a few trades and locked in profit on them, bagged 100 ticks and shut it down. Want to keep it, need to bring home more days like this instead of giving it back.

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  #23 (permalink)
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legend4life View Post
This is great information, thank you for sharing. Could you please give more detail on how you track the swings by timeframe, and % of occurrence? How does your risk relate to your target 1 and your target swing in terms of % occurrence, and how much of your position do you scale out?

I am at a point where I am able to get decent entries on CL, with a small risk, that easily can run to 20, 30, 40, 50, 60 ticks, and rarely, I can catch the big swings of 100, 200, 300 ticks, however I am always battling myself on where to take profit, and most often end up giving most of my unrealized profit back in hopes of hitting a swing. Thus, my win rate is really low.


To track swing length, I manually enter the swings into a spreadsheet and have it enter a "1" if the swing was "greater than". I attached a sample excel file. An indicator that I found on this site that made that much easier for me is the PriceActionSwing, with nearly all of the function turned off but Swing Length set to ticks. That is the easy part...

Crude most likely whipsaws anyone who trades it. It typically has 20-30 tick retracements that can feel frustrating when you are going for a longer move. It can be hard psychologically to be up 30 ticks per contract and then watch it disappear, and harder still to have your stop hit a few minutes later. The answer, for me, of when to take profits starts by determining what profit you expect.

If I am trying to expect ( a key element ) a larger move, I use several factors, and preferably in combination;

1) Fibonnaci clusters on higher timeframes. If I can find a confluence area, that is also potentially the end of an ABC correction, or the end of wave 4, or a consolidation with double tops/bottoms. I don't persanally like the automatic ones, but they may work fine. I use simple fibs pulled from 3-directions; an alternate projection of a previous wave, plus an extension of the recent counterwave, plus a retracement of the larger picture.

2) Volume exhaustion on a 1 minute chart. When the support/resistance areas establish, and then crude takes those out by just a few ticks (or 30), and during that move extreme volume come in but the price does not ove much, or even reverses.

3) Trendlines. When price gets near a higher timeframe (60 minute / daily) trendline.

4) Divergence on a higher timeframe. I like Momentum and a 2-period RSI.


Crude is running at a 10-day ATR of 257 ticks. But, the odds of you catching the top/bottom are stacked against you pretty hard, and trying to do so will be financially painful. But getting closer to the bottom gives a higher reward-to-risk. To me, the most critical part of selecting an entry point is;

5) Some sign of trend reversal. This can be taking out the high/low of the previous x bars, or a moving average crossover, or a channel reversal, or a MACD crossover, or whatever looks right to you. I use more than one, and use range bars and wicked renko bars as my trigger, not time based bars. Currently I watch a 9 wicked renko with a Holt 89/144 and a 6-range with a T3 144. When price breaks out crossing both, (and assuming crude has possibly confirmed something in 1-3 above) that is the direction I am looking to trade in.


But possibly the most important factor in catching a big move, assuming you have done everything else to stack the odds in you favor, is to BELIEVE IT WILL HAPPEN. Without that you will worry, you will want to limit your potential by locking in profits. Your win percentage can be 25% if you risk 30 ticks to get 150. But those moves take time, typically whipsaw back and forth, and if you are watching it happen will find every way possible to make you doubt yourself.

We all have the potential to take those longer swings, but the question is, are we personally wired to be able to?

Attached Files
Register to download File Type: xls 9 renko swing size.xls (326.5 KB, 39 views)
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  #24 (permalink)
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Here is an example that occured just today. On the 30 minute chart of CL, we are clearly in an uptrend, and it apeared that an ABC correction was setting up. I pulled a 61.8 retracement of the previous move up, a 127 external of Wave B, and a 100% projection of Wave A. Notice the confluence area between 98.33 and 98.50.


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The I waited for the reversal on a 9 wicked renko, to break above the 89/144 Holt, then a pullback to the regression channel. The entry was at the first white bar coming out of the regression channel at 98.78 around 10:15am EST.

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  #25 (permalink)
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Notice the volume confirmation that occured at 10:25am EST. 1800 contract 1 minute bar with a very small range. This market did not want to come down right now.


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  #26 (permalink)
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@GaryD,

My apologies - but due to my screw up, your last three images shared via bmcharts.com were deleted. Very sorry about this, first time I've ever done something so stupid like this.

Mike

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  #27 (permalink)
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That's OK Mike. I'll post another one later.

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