Market Profile chart for CL up to and including 5/7. I also include a chart with some past merges that show value was declining on a higher time frame. In other words, the two merges are both about 2 weeks in length, but the value area was falling from one two week period to the other. Just an interesting observation at this point in time. There is also a 60 minute bar chart that shows where the merges would be as well as possible support areas for CL.
The following 2 users say Thank You to David_R for this post:
For my method, swing trades are very similar to day trades just, as you say, on a higher timeframe.
As it turns out my idea for a short CL trade would have worked perfectly. I don't swing trade crude but it was a nice opportunity.
Trading with the "trend" is difficult cause I don't really believe in trend. The market is fractal and there are trends & trading ranges at all timeframes, often in opposite directions. So the trick is to find out in what timeframe is the market cycling, verify professional activity is confirming the cycles, and then trade that timeframe.
For example using ES, we can have on the monthly we can have trend down, on the weekly have trend up, on the daily have trend up, on hourly have trend down.
This is why I monitor a market on several timeframes and really it's why I trade only ES because it's time-consuming to trade several.
The following user says Thank You to cunparis for this post:
Yes, you certainly had it right on CL. You had the call, but there may have been a day or two more to the upside. I'm not sure how one would handle a swing on CL if you had to sit through a couple bucks of heat. I guess if one has deep pockets it wouldn't matter. I think that is where turning a day trade short into a swing would be a good idea.
That's my problem, I don't want to take a few days of heat with CL. That could be $2000-$5000. Trading USO is one choice. QM is another. but for me it's more about practicing and testing my understanding of the market.
I've also learned that spotting a good opportunity and putting money on the line to capitalize on it are two different things. I often "know" ES is going to do something but always manage to mess up the trade by being early or getting out breakeven before the big move, etc. Very difficult. But practice makes perfect.
Another thought is if you are confident in your "knowing" that ES is going to do something you could try an option play of some kind. Either options on futures or as you said USO for CL, you could do options on the SPY for ES. That would have worked out nicely as well.
The markings are placed by me after the fact. I do feel that is the way the market works. It is in balance aka consolidation and then it moves to imbalance aka vertical move and then back again. I also find it interesting that the areas of balance or consolidation tend to be the areas where supply and demand are. As always, trading it in real time is the tough part.
The following user says Thank You to David_R for this post:
For swing trades I think your better off with USO unless you have a very large account, because even QM is still quite large to swing multi-day.
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