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LIS is my stop method. It does indeed stand for Line In Sand. Rather than placing my trades with hard 15-20 tick stops I strive for entries that put me into a position with risk of 15-20 ticks in relation to my LIS. Oh, and I ALWAYS have a hard stop in place, just further away so I can choose when to exit rather than having the market take me out on its own.
If price pushes through the LIS and then closes back on the positive side of my LIS I will hold on to the trade or scratch it at a smaller loss if I feel like I am wrong on my trade idea. If it closes on the wrong side of my LIS I simply exit the trade with the loss.
It is another way of saying if price continues to hold the key level I am using for my trade setup I will hold on until proven wrong by price being breached on the wrong side of the level. It is a method that works quite well for my use but certainly needs much practice too be implemented.
Thanks for participating in this thread, I really appreciate it!
Overnight we had traded within value, common for the FOMC days. When RTH opened price tried to move below value but was rejected, leading to a move higher the rest of the day, though via the slow grind.
An interesting observation in that the 30m chart could not close a candle body below value, a good key to the move higher. I considered four trading opportunities based on my trading plan, listed below
Trade 1 long on the close of the first 5m candle as we held within value. LIS VAL. Price took a bit to get moving and then moved up nicely but couldn't make it up to overnight high before reversing. This trade offered minimal reward and could easily have been a scratch or small loss if taken
Trade 2 short as price reversed through OP and outside value. LIS VAL. Price couldn't get any traction lower stalling about around the 3540 repeatedly. Again this trade offered minimal profit opportunity and could have been scratched if you saw that sellers were running out of steam or a reasonable loss as price pushed back up into value.
Trade 3 long was the best trading opportunity of the day. 15m chart candle closed bullish just above the OP back inside value after the attempt lower was rejected. LIS OP. Nice swift move higher stalling out at the POC level with lots of time to decide whether to hold or exit with a nice profit.
Trade 4 short as price rejected a move outside of value higher after the news release. Price moved back down nicely but stalled out at the overnight high level and then started a slow grind back higher. LIS VAH. Another limited profit opportunity but plenty of time to scratch the trade or take a small profit.
CL today featured the oil report and then we had FOMC. I was cautious as we had moved down significantly overnight, well below y'day value area. Price continued moving down after the RTH open and eventually stalled out at a previous swing level and could get no lower after the news report, using the 5m news candle as support and eventually moving price back up.
I saw a couple of trading opportunities today.
Trade 1 short after price moved below the overnight low levels and a previous npoc I had marked. LIS overnight low level. Price worked its way lower and eventually stalled out near the previous swing level prior to the news release.
Trade 2 short after the news release. LIS NPOC level, which was near the top of the news candle. Price stood around quite awhile before moving on down to again test the swing level, where it stalled out.
Neither of these trades were home runs but they were good for a decent profit.
NQ traded overnight above y'day value all night with yVAH defending any attempts to push down into value. On the RTH open price attempted one push into value that was quickly rejected and after one more retest down price worked solidly up to try the 3600 level. That area was rejected and we spent the rest of the session grinding slowly lower back to the OP. Three trading opportunities according to my trading plan
Trade 1 long on rejection of a push back into y'day value. Price retraced quickly and closed back above the OP giving a low risk long. Price worked up to the overnight high where it stalled and gave a lot of time to take a small profit or scratch the trade if needed.
Trade 2 long same idea as trade 1, rejection of y'day value area. This time it was after the news release and we got some legs on this push up, working to the 3600 level where it stalled out wtih a volume spike signaling a good chance to exit with a nice profit.
Trade 3 short on rejection of the 3600 level. Lower highs signaled a good possibility of this trade working. Price slowly worked down back to the overnight high where we had a volume spike exit opp or you could have held to the OP as well if you were scaling out.
Overnight CL started at the top of y'day VAH and worked bearish until the RTH open. Price rejected the move lower and pushed back towards value. Price moved up and rejected at yday Value and then pushed on higher to again retest the yVAH. From there price rotated lower finishing the session in the middle of the range.
Normally I would suggest a trade long opportunity at the close of the opening 5m bar but price had moved so far it would have been a high risk entry so I did not consider a long entry at that time.
Trade 1 short on rejection at yVAL, price worked down nicely but reversed back higher not long after the news release. LIS was yVAL with initial target to get back lower through OP and make new lows, continuing the overnight down trend.
Trade 2 short on rejection at Overnight high/yVAH. Price worked back down but stalled out at the yVAL area and it would have been hard to hold on through the chop so probably exit during that chop with a small winner. LIS was VAH and initial target idea was a move back towards the OP or lower.
