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The Crude Dude Oil Trading System
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The Crude Dude Oil Trading System

  #261 (permalink)
Elite Member
west palm beach florida usa
 
Futures Experience: Advanced
Platform: ninja trader
Broker/Data: Optimus Futures/ Rithmic
Favorite Futures: Cl, TF
 
Posts: 717 since Oct 2011
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PandaWarrior View Post
As you probably know, the idea of a daily goal is something that I struggled with for a long time. It was purely emotional on my part. I liked thinking I make "X" dollars per day per contract. The truth is, the market doesn't care if you want to make "X" or "Y". It just does what its going to do and its our job to extract what we think we can reasonably expect to extract consistently day after day.

Compounding this issue was the idea that many people both here in the forum and elsewhere kept saying, that " you have to absolutely kill it on days where your winners run and run. But this only frustrated me further. On days where I held, I'd give up 20-30 tick winners only to have them come back to BE or turn into losers. On the days where I took the 20-30 tick winners, it ran like crazy. This drove me absolutely bonkers over time.

After a long time, I finally made peace with the idea of daily bread. Just take a certain amount every day and be happy with that. Except for one thing, I kept thinking daily bread was a set number of tick per day. Again this was/is counter productive. Some days those set number of ticks can be pretty hard to come by. Finally after many many months of emotional struggle, the answer hit me like a ton of bricks.

I primarily trade from consolidation to expansion. This means I wait for narrow patterns to form and then look for that moment in time where price is making its escape from that area. Some people call it a break out and I guess it is but there are lots of nuances that make it more complicated than a simple BO.

Suffice to say, the idea of consolidation carries with it the idea of range expansion. Therefore, I arrived a way to determine the daily bread number based on that range expansion. Sometimes thats gonna be 20 ticks and sometimes thats 40 ticks. Whatever pattern I'm trading has a mathematical target zone. I aim for that zone. That's it. If I make it, then I'm done. That's my daily bread. No more, no less. When I start looking for more, I end up losing or getting less than optimal results.

Add all this up over the week and I end up with a nice week. Size up when the risk is appropriate and a nice trading plan appears.

In a nutshell, daily bread is dynamic and not fixed. This fixes my issue of how many ticks to go for. Its just whatever the patter says to go for....its made a huge difference in my emotions while trading, its allowed me to be much more patient with both the set up and the payoff.

Thank you Brian for your comments and observation. I really like and agree with your concept of trading the range expansion. Sometimes when I start trading at 9 am est, I might find a recent "range expansion" that is already under way. Other times, it may not show up until way later in the session...or not at all.
The problem with CL is it can be very tricky as far as determining what kind of market conditions you are dealing with. Sometimes you get what seems to be a strong sudden move that starts spiking. It leads you to believe that it will be a move with some strong follow through and then it suddenly fizzles and quickly reverses.
Some things I look for is how strong are the pushes or "waves" I am seeing. This is not really the same as Elliot waves..but more like noticing how far and fast did price go in some it's price swings. To me, the wave is about price moving in a strong directional move while staying in a fairly tight ema. When the price exits the ema, I call that the end of that wave. So, if I'm seeing these large fast waves...and price hasn't hit any strong areas of support and resistance, I know at some point after a pullback, I could get another strong wave to ride under these conditions. On other times, you might see the consolidation you were referring to, where price can go a few ticks up..exit the ema..then turn right around and just chop around. So my point is..the bigger waves I am seeing on a particular day can help determine my target size and of course this ties in with what kind of order flow and volume is present.

I like your "Daily Bread" idea as well. My problem is even after all these years, I still realize I am caught up in the concept of over emphasizing having a winning day. If I am 20 ticks down..or so, I still feel that compulsion to make up those losses and end up feeling like a winner..for the day, instead of a loser. Sometimes, though, it might not be a good day to attempt anymore trades. So I need to understand it's ok to have a small losing day and that in no way did I FAIL. So, I don't have to keep going till I hit my maximum loss limit for the day.
I want to be able to trade more like how a robot or machine would trade. Now, I really don't feel there is a way to automate my trading. I can't think of a way to have a program that can discern certain variables such as market conditions and price action patterns and setups the way my brain can see them. But assuming I could automate my system, the algorithm I would want.. obviously wouldn't worry that it was 20 ticks down on the day. The algorithm would not worry about the need "To be made whole" and start taking sub-optimal setups. It would wait until all the conditions were met..and take the highest probability setup..calculate a reasonble target and fire off the trade. If the conditions didn't show up on a particular day, no trades would be taken. This is how I need to be. I need to be kind of a like a "Cyborg"...which has the human brain's pattern recognition combined with a machine like ability to avoid all impulsive and counterproductive emotional responses.
So...maybe we become The Crude Dude Cyborg Trader??? lol

Failure is not an option
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  #262 (permalink)
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lancelottrader View Post
Thank you Brian for your comments and observation. I really like and agree with your concept of trading the range expansion. Sometimes when I start trading at 9 am est, I might find a recent "range expansion" that is already under way. Other times, it may not show up until way later in the session...or not at all.
The problem with CL is it can be very tricky as far as determining what kind of market conditions you are dealing with. Sometimes you get what seems to be a strong sudden move that starts spiking. It leads you to believe that it will be a move with some strong follow through and then it suddenly fizzles and quickly reverses.
Some things I look for is how strong are the pushes or "waves" I am seeing. This is not really the same as Elliot waves..but more like noticing how far and fast did price go in some it's price swings. To me, the wave is about price moving in a strong directional move while staying in a fairly tight ema. When the price exits the ema, I call that the end of that wave. So, if I'm seeing these large fast waves...and price hasn't hit any strong areas of support and resistance, I know at some point after a pullback, I could get another strong wave to ride under these conditions. On other times, you might see the consolidation you were referring to, where price can go a few ticks up..exit the ema..then turn right around and just chop around. So my point is..the bigger waves I am seeing on a particular day can help determine my target size and of course this ties in with what kind of order flow and volume is present.

I like your "Daily Bread" idea as well. My problem is even after all these years, I still realize I am caught up in the concept of over emphasizing having a winning day. If I am 20 ticks down..or so, I still feel that compulsion to make up those losses and end up feeling like a winner..for the day, instead of a loser. Sometimes, though, it might not be a good day to attempt anymore trades. So I need to understand it's ok to have a small losing day and that in no way did I FAIL. So, I don't have to keep going till I hit my maximum loss limit for the day.
I want to be able to trade more like how a robot or machine would trade. Now, I really don't feel there is a way to automate my trading. I can't think of a way to have a program that can discern certain variables such as market conditions and price action patterns and setups the way my brain can see them. But assuming I could automate my system, the algorithm I would want.. obviously wouldn't worry that it was 20 ticks down on the day. The algorithm would not worry about the need "To be made whole" and start taking sub-optimal setups. It would wait until all the conditions were met..and take the highest probability setup..calculate a reasonble target and fire off the trade. If the conditions didn't show up on a particular day, no trades would be taken. This is how I need to be. I need to be kind of a like a "Cyborg"...which has the human brain's pattern recognition combined with a machine like ability to avoid all impulsive and counterproductive emotional responses.
So...maybe we become The Crude Dude Cyborg Trader??? lol

At issue is not the method, but what it can reasonably produce every day. The Daily bread concept is that sometimes, your daily bread is a negative day. Not that you lost but that the market didn't have anything to give you that day based on how you see and trade the market. As long as the process is followed, then a losing day is nothing to be ashamed of or to beat yourself up over.

That being said, I think its possible to win every day. Is it probable? Most likely not but long winning streaks should be the norm and not the exception. For me, the emotional win of doing it right is more important than the dollar win.

I agree with you that averaging 50-100 ticks a week is a home run. Size up when the risk is appropriate and your golden!

Simplicity is the ultimate sophistication, Leonardo da Vinci


Most people chose unhappiness over uncertainty, Tim Ferris
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  #263 (permalink)
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Fredericksburg, Virginia, United States
 
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Awesome Thread


Just read the thread from start to finish. Crude Dude and Panda, thanks for the great commentary. The evolution from the beginning to the current was awesome to read. I wish the Crude Dude lots of success and I will be watching with great anticipation as your journey continues. Please consider adding to this thread as you move forward.

THANKS MUCH!!!

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  #264 (permalink)
Elite Member
west palm beach florida usa
 
Futures Experience: Advanced
Platform: ninja trader
Broker/Data: Optimus Futures/ Rithmic
Favorite Futures: Cl, TF
 
Posts: 717 since Oct 2011
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PandaWarrior View Post
At issue is not the method, but what it can reasonably produce every day. The Daily bread concept is that sometimes, your daily bread is a negative day. Not that you lost but that the market didn't have anything to give you that day based on how you see and trade the market. As long as the process is followed, then a losing day is nothing to be ashamed of or to beat yourself up over.

That being said, I think its possible to win every day. Is it probable? Most likely not but long winning streaks should be the norm and not the exception. For me, the emotional win of doing it right is more important than the dollar win.

I agree with you that averaging 50-100 ticks a week is a home run. Size up when the risk is appropriate and your golden!

I agree 100%. I have become much more "process" oriented than results oriented. I know if my process is followed, the edge of the system will take care of the results .

Failure is not an option
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  #265 (permalink)
Elite Member
west palm beach florida usa
 
Futures Experience: Advanced
Platform: ninja trader
Broker/Data: Optimus Futures/ Rithmic
Favorite Futures: Cl, TF
 
Posts: 717 since Oct 2011
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fsrcapital View Post
Just read the thread from start to finish. Crude Dude and Panda, thanks for the great commentary. The evolution from the beginning to the current was awesome to read. I wish the Crude Dude lots of success and I will be watching with great anticipation as your journey continues. Please consider adding to this thread as you move forward.

THANKS MUCH!!!

Thank you..I'm glad you have gotten something out of it.

Failure is not an option
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  #266 (permalink)
Trading Apprentice
Vancouver, Canada
 
Futures Experience: Intermediate
Platform: Ninja
Favorite Futures: ES
 
Posts: 5 since May 2015
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lancelottrader View Post
Awesome, glad to know there's people doing well with this sort of style. I think when you've seen price move after a news event, you get an idea of how fast it can move...and witness an extreme "Pace of tape". Of course, those news moves can be initially chaotic. I prefer to wait at least 3 to 5 minutes..sometimes more. But once an Event, whether it's news or just a huge orderflow move, creates momentum, then the moves become more directional and bigger both up and down at times..Then all my signals become more valid. My belief is that most of the time, price movement is very hard to predict and it's only for a few minutes where you know..with a high degree of probabilty, that it's going to move directionally for a some ticks.. And you must move fast without hesitation..And if you know the next immediate area of price congestion, that can be your initial target. If it breaks through that level, you have a potential runner on your hands. Here's another TF chart from a couple weeks back. I made a 100 ticks right at the close of the Equity session. If you look at the chart you will see a thick black spine that is on the outside of the white price line and the colored "Rainbow lines"..Sometimes if I feel the trade has more potential, I won't exit on the breach of the Stoploss dots. Instead I will keep manually moving my stop (On Ninja's Chart Trader) up, but keep it just outside the black spine. As you can see the trade runs up about 100 ticks before it breaks out of the Spine. This was the biggest Runner I've ever caught in my life . Remember, I'm a scalper by nature ..and I will exit with 4 ticks or so if I feel that's all it's going to do..and I seldom have an initial stop of more than 10 ticks . I don't know if it's psychological or what..but after entry I used to exclusively watch my P and L..not the chart and as soon as I was up a few ticks, I'd get anxious and exit as soon as possible. But with the Chart Trader, I watch the price on the chart and just keep dragging that stoploss bar and follow the price..I guess because I'm not so focused on the profit or loss, I just concentrate more on the chart. Anyhow, it's working and learning to stay in a winning trade longer is what took my trading to another level. I did ok scalping, but the hit rate has to be so high to really make money. Now, I lose a few small one's..win a few small ones..and then ride out "The Big Wave."


Is your trading based on your software or based on your own methods? If it's your own method, how long did it take you to be consistent?

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  #267 (permalink)
Elite Member
New York, NY
 
Futures Experience: Intermediate
Platform: ThinkOrSwim
Broker/Data: TD Ameritrade
Favorite Futures: TF
 
Posts: 13 since Apr 2015
Thanks: 20 given, 7 received

Hey Lance,

Thanks for the excellent thread - you're definitely one of the greatest assets this forum has. Over the past week or so, I've read through your posts and watched the majority of your videos and I must say, it's exactly what I needed. Finding videos of successful traders trading live eluded me until I discovered your thread. (Youtube is filled with people advertising their wares and so forth)

The biggest lessons I've learned so far are three things:
(1) Buying on pullbacks instead of giving up ticks waiting for more confirmation
(2) Properly using support / resistance price levels from the trading day and previous days
(3) Place realistic targets and stops, trading only when there's sufficient momentum, and trading high probability setups when scalping.

I decided to put the knowledge I learned from this thread to use in the morning session today (9:30-12pm) and the results have been great. Using the lessons I learned from your videos, I've ended up +95 ticks trading TF this morning (5 winning trades & 1 loss). That said, I do know that an individual day's results suggest little unless compared to P/L over time.


Additionally, do you know if there is a free tool similar to the LogicalForex software you have? A system that draws relevant support / resistance areas would be great.


Last edited by vdersar1; May 21st, 2015 at 02:05 PM.
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  #268 (permalink)
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reston, va
 
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vdersar1 View Post
...
....A system that draws relevant support / resistance areas would be great.

try TSSupertrend, use EMA and multiple 2-5, play with multiple until you see something you like.
https://futures.io/download/ninjatrader-7/indicators/52-download.html?view

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  #269 (permalink)
Trading Apprentice
Seattle, WA
 
Futures Experience: Beginner
Platform: NinjaTrader
Favorite Futures: Oil; Commodities
 
Posts: 5 since May 2015
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This is a fantastic thread

I have almost went through the whole thread and I think I am going to start trading soon, and SIMing to get my hands dirty and start feeling out the momentum times in the CL and NQ instruments, and of course, keeping y'all updated on futures.io (formerly BMT) (probably on this thread).

... I just had question, I know you've talked a lot about this on CL; do recommend any good days and times to trade on the NQ at this point in time when the momentum is flowing?

For me, it's really hard to see momentum flowing when I don't have that indicator to show the squares on the chart. That is going to be my biggest obstacle, and also I'll only be trading with $1000 real money in my account once I leave the SIM rankings. Once I can identify momentum consistently I think I'll have a lot more confidence in myself and using this system, which I am really looking forward to. I am a huge visual person and I really understood when you said you can't be looking at the PnL counter when coming in and out of trades. It's an art that you develop by looking at the graphs and "painting" the trades on the graphs.

I just wanted to say to both lancelottrader and PandaWarrior you guys are really putting some really great resources out there and that if people are interested in doing their due diligence and learning a set strategy, can learn quite a lot from both of you from reading the beginning of this thread to the present day now.

I've got a whole summer to do absolutely nothing (I am an engineering student on break) but to watch charts and see if I can find some real good consistencies; once finishing reading through this thread, I think I will be ready to start...

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  #270 (permalink)
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Futures Experience: Intermediate
Platform: ThinkOrSwim
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cory View Post
try TSSupertrend, use EMA and multiple 2-5, play with multiple until you see something you like.
https://futures.io/download/ninjatrader-7/indicators/52-download.html?view

Thanks for the suggestion. Interestingly enough, I've already downloaded and imported this indicator into NT. Additionally, I believe this indicator is more similar to the Rampage system Lance uses instead of the logicalforex system.

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