Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: My own custom solution
Trading: Emini Futures
Posts: 49,785 since Jun 2009
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Honestly, the recent price action probably throw many CL traders off the course. I mean, it still has great moves, but I am seeing a lot $1 in 5 minutes chart. I am start thinking, maybe a 80 cents target 3 is short changing myself now.
Ohh.. here is my trend trading strategy on 5 minutes.
5 minutes chart setup: 20ema, don't look at volume on RTH.
Below is today's CL (7/13/11) PA, and how I read it before there big move up.
1) Wait for strong price action
2) Wait for confirmation
3) Wait for pullback (PA must be weaker than 1 and 2)
4) Enter on breakout of pullback bar, or previous 2 bars
The following 3 users say Thank You to cw30000 for this post:
This is a takeoff on what AR01 and TMFT were talking about in FatTails thread All those smart guys inspired me to do something a bit simpler than what I'm currently doing with the LLMA. I'm not giving up the LLMA by any means but exploring another …
Hello all,
I have not been posting for various reasons lately (massive go-live for my project). I have been reading and appreciate everyone's generosity.
Background:
My full time job keeps me from day trading as much as I would like. I'm learning …
Hello,
This is my first post of my journal. My husband has encouraged me to do this. (Read into "encouraged" what you will.) Public self-examinations are very difficult for me.
I have been attempting to learn Forex trading for a little more …
The following 2 users say Thank You to MWinfrey for this post:
FIRST & FOREMOST I DONT WANT PEOPLE ASKING ME HOW I OBTAIN THESE #'S, CAUSE I WONT BE ABLE TO SHARE MY SOURCE... SO USE THEM WITHOUT ASKING MY TECHNIQUE... THANKS
Yea. I personally find reading just price is a lot easier. I've paid many years in tuition and have tried many many holy grail methods, and they don't work. I don't understand them. But reading price is simply enough. I just have to worry about price and nothing else. Of course, I do use trendline HH/LL, HL/LH.
Just doing demo, no real money yet. Just waiting for my kids to head to school in fall. Still working on the psychology of trading.
The following user says Thank You to cw30000 for this post:
I pay for an automatic program from someone and it does decently well, but one thing I noticed is that it trades off a 89 tick chart. Maybe instead of minute charts you could use tick charts with larger or smaller time frames? Seems to clean the chart up pretty nicely.
This is not what I currently trade, my "setups" have gotten a lot more involved. But for something extremely simple that I used to use to make good scalp trades, play with this setup;
XMA Price Envelope #1 (Red/Green) set to 11 period and 0.04 offset
XMA Price Envelope #2 (White dotted) set to 15 or 17 period and 0.08 offset
The ENTIRE BAR needs to break out above / below the channels to qualify. Wait for a pullback into the "zone" (below the red and above white for longs, above green and below white for shorts)
Obviosuly, reading volume, understanding support/resistance, using trend filters, and above all, understanding your market, can help considerably. No indicator alone can save you. Trade in simulation until you can log net wins consistently.
I am no longer a big fan of backtesting, but I used to spend literally thousands of hours at it. I have this old spreadsheet showing where I added trend filters of a 17 and 50 EMA, but ultimately I decided those did not matter that much. And, back then I only required the "breakout" to be beyond the Breakout Channel, but later tightened my criteria to limit trades to only breakouts beyond both. The entry point below was the "entry channel", but it really does not matter to the tick if you have other contributing factors.
Additional Rules:
- Expect to be wrong often. These type of systems rely on staying consistent.
- Do not average in. Do not double up to recoup losses. You will eventually lose.
- Do not move you initial stop. Instead, focus on learning where to put it. Stops keep you in the game.
See if you can add some rules to make this better.
Anyway, something to play around with. Let me know if this helps you. If adding supertrend does anything let me know as well. Stay safe!
I would say that you should have an understanding of the fundamentals to trade oil. Intermarket and macroeconomic analysis comes very in handy. If not, at least stay out of the market when news is released...
As for the price action itself, it trades very cleanly. It definitely makes sense to let your winners run...
In fact, the most basic principles works perfectly well. It is a volatile instrument, use that to your advantage...
Although I posted a setup with a small stop and small target, you can also trade oil effectively (possibly more effectively) with 20, 30, 40, 50 tick stops, because crude has such extreme ranges. I actually don't recommend scalping, but some people are very good at it. And a lot of traders seem to prefer it for the small perceived loss and short hold time. But, learn to let one run and crude is a market where you can make up multiple small losses in one good trade, if you can just hang on and not let it fake you out. The supertrend may do that for you on the right chart.
I've used every combination of indies on a 12 range chart. Most of them work. But for me, CL moves so fast most of the time that simpler is better.
So I now use only a 50SMA that changes color based on slope.....trend lines and certain bar patterns that set up quite frequently on CL at or near trend lines.
I agree with the 20-30 stop and targets. Get it right and you can easily get 100 tick runners. But for me, after talking to a major ES trader, I've gone with smaller targets based on my personality type. I target 10-15 ticks a trade, look for net 30-50 a day and call it quits. This usually works out to being done within the first hour or so. Sometimes longer if I hesitate and not take trades. My fault there.
But essentially, you can trade CL with very simple indicators. The super trend works well if you plan to hold for a long time. Just don't use to tight of a multiplier, you'll get lots of chop. I had mine at 3.75 or 4. Those settings did a decent job of capturing the trends. I never entered on the super trend change though. I always waited for at least a 38% pull back and hopefully more.
Hope that helps.
Simplicity is the ultimate sophistication, Leonardo da Vinci
Most people chose unhappiness over uncertainty, Tim Ferris
The following 3 users say Thank You to PandaWarrior for this post:
If you're going to trade CL, you'd better have your $**t wired tight.
You'd better be able to stomach some wide swings if your entries aren't superior as the big players love to push retailers out of their positions.
In essence, if you don't have sufficient capital to trade with some wide stops, you'd better have a serious entry edge.
Furthermore, CL not only has range, but velocity, so if you're going to discretionary trade, you better have mastered the nuiances of the market and have an intimate knowledge of how it moves.
CL moves so quickly, that those who don't have a seriously solid PLAN and stick to it, can get spun around and when they catch their bearings, their account is blown.
Slower moving instruments will allow you to more time to react, verify, etc. (which may or may not be a bad thing). CL requires you to have your approach/setup down cold. A couple of wrong moves and it's curtains.
"A dumb man never learns. A smart man learns from his own failure and success. But a wise man learns from the failure and success of others."
The following 2 users say Thank You to RM99 for this post:
There's more than one journal on trading CL in the general journal area. Actually at least 6 active journals on CL counted currently. mfbreakout has a journal on trading CL using the ACD method by Mark Fisher.
