I have been trading the CL market & enjoy trading it. But I have to improve on my methodology & looking for some suggestions please.
My Mistakes: The last few days have been very choppy with long spikes. Trailing stops / stop loss would not seem appropriate but waiting for the trend to develop while in the market is also not the option. I understand it is best to stay away from such a market, but then a trend is developed which seems amazing & I feel like a bummer missing out on it or being in the wrong side of it.
How do you identify a trend reversal on a 5 in time frame?
What kind of a stop loss or trailing stop have you had a success with?
How do you identify the market range before hand?
Its tough to define a trend because its a bit subjective and its always best to have your own parameters that define bullish , bearish or stay away conditions . Also , whatever you use to define the conditions - STICK WITH THE SAME DEFINITION for as long as possible and dont change it unless you have solid proof that its not strong . In other words define what you call a trend ( or bias , thats what I call it ) write it down and test it under all kinds of market conditions and when you have a lot of samples you can measure your results and then youll know exactly what to change and adjust .
What I have been using , and its good for a 5 min. , is just the 20 ema as a reference point . Then when an entire bar manages to trade above or below the ema without touching the ema then thats the direction I look to trade and enter after retracements occur . When an entire bar trades on the other side of the ema without touching it then ( to me ) the trend has changed direction . Its simple and effective and easy to repeat over and over again .
If I was trading CL though I would read and digest Jeffs AYN thread and adapt it to my tastes cause that guy kicks the CLs butt most days .