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Chart reading quandry
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Chart reading quandry

  #1 (permalink)
Elite Member
Dayton, Ohio
 
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Platform: TOS
Favorite Futures: GC, CL, Eurodollar
 
Posts: 15 since Nov 2017
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Chart reading quandry

My favorite trading vehicle is /CL (crude oil futures).

I don't know whether my chart (or other) indicators are lacking, but recently I've run into a series of price drops or price increases that come out of nowhere and continue for brief or longer period of time, then trading resumes its normal somewhat up/somewhat down pattern.

For instance, in the attached pic, on the left, crude dropped from $58.80 to $58.30 in the span of a minute to a minute and a half. BOOM! I saw nothing to indicate that it was coming, nor did I have a feel for when it was going to end, until the price had moved back up to $58.40 - then I figured that $58.30 was a short-term bottom.

I try to capture a nickel or dime move on 10-20 contracts, and if I was long during such a drop, or short during the reverse, it would be "stressful".

I would greatly appreciate any suggestions about what resources I can seek out, or modifications that I can make to my charts to give me a better feel for price movement so that I can reduce my chances of being caught in such down/updrafts.

Thank you.

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  #2 (permalink)
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  #3 (permalink)
Market Wizard
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bulge View Post
My favorite trading vehicle is /CL (crude oil futures).

I don't know whether my chart (or other) indicators are lacking, but recently I've run into a series of price drops or price increases that come out of nowhere and continue for brief or longer period of time, then trading resumes its normal somewhat up/somewhat down pattern.

For instance, in the attached pic, on the left, crude dropped from $58.80 to $58.30 in the span of a minute to a minute and a half. BOOM! I saw nothing to indicate that it was coming, nor did I have a feel for when it was going to end, until the price had moved back up to $58.40 - then I figured that $58.30 was a short-term bottom.

I try to capture a nickel or dime move on 10-20 contracts, and if I was long during such a drop, or short during the reverse, it would be "stressful".

I would greatly appreciate any suggestions about what resources I can seek out, or modifications that I can make to my charts to give me a better feel for price movement so that I can reduce my chances of being caught in such down/updrafts.

Thank you.

On Crude such movements can be quite the norm. Especially so close to fundamental-driven events such as OPEC meetings.

Do you trade 10-20 contracts live?

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  #4 (permalink)
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As soon as I read somebody is trying to scalp for five or ten cents on crude I assume they have been reading the Scalper's Journal thread and seen how easy it is to make a grand a day with the lure of a psychologically comfortable high win rate and making money almost every day. Then tried it and found it isn't quite so easy after all. Scalping can be easy for a day or two for a lot of people but trying to be consistently profitable doing it is very hard. There are always exceptions who do it well, but they will have done it enough and know their chosen instrument well enough that despite having their charts etc I suggest that they will be trading almost completely instinctually when going for such small moves, not just for when to enter but for scalping the almost more important knowing quickly when to scratch or not take the trade in the first place.

There is nothing wrong with your chart setup if you are happy with the indicators you are using. There are no special indicators that will tell you what is going to happen in the future. You just take your most educated guess/probability based theory/indicator setup, and then take the trade with an acceptable risk, acceptable even with slippage. Crude has a reputation as a trending instrument It can easily push 50-100 ticks when it gets going, and when it is being pushed the further it goes the further it wants to go, until it runs in to a big enough wall of absorption at which point the momentum traders get out and price runs the other way. It is an auction price runs from one level of liquidity to the next, with crude those areas can be far apart.

If you were trading 10-20 contracts live and it is too stressful for price to move quite normally then you are trading too large for your account. As you say you are a beginner I assume you are actually sim trading. If you are then I would respectfully suggest you cut your size down to an equivalent of what you will be able to trade when you start live. Otherwise you are just wasting time on a daydreaming computer game. If you spend a few weeks making a packet with unrealistic size then go live with one or two lots you wonít be happy making such small amounts compared to how much ĒmoneyĒ you were making every day in sim and unless you differ from the norm you will be doubling down and taking excess risk before you know it, followed by stress and large losses. Finding a trading method you can do calmly and realistically for a while in sim, so you trust your method and tools, and then go live and do exactly the same thing.

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  #5 (permalink)
Market Wizard
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I have not found many indicators that will consistently predict the future.
(Crystal Balls are rare)

If you want to trade this type of move you need to have the screen time to know such a move is coming.
I suggest many years will be needed to do this.

One way (but not the only way) to gain an edge is to 'read' the tape/dom.
Futures.io has several videos of this type of trading.
One such method is No BS Trading.
There are videos on Futures.io and here : No BS Trading Videos

For new traders, trading in this way is extremely difficult and takes a lot of experience to master (IMO).

Good Luck with your journey.


bulge View Post
For instance, in the attached pic, on the left, crude dropped from $58.80 to $58.30 in the span of a minute to a minute and a half. BOOM! I saw nothing to indicate that it was coming, nor did I have a feel for when it was going to end, until the price had moved back up to $58.40 - then I figured that $58.30 was a short-term bottom.


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  #6 (permalink)
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bulge View Post
I try to capture a nickel or dime move on 10-20 contracts


Please forgive me for commenting (with helpful intentions!) that in my opinion, especially in the context of CL, this sits very, very uncomfortably indeed with the words "Futures Experience: Beginner" beneath your name.



bulge View Post
I would greatly appreciate any suggestions about what resources I can seek out, or modifications that I can make to my charts to give me a better feel for price movement so that I can reduce my chances of being caught in such down/updrafts.


Again, I don't mean it to sound as disparaging as it might, but I can't help wondering whether you might perhaps be asking a "bad question", here, because you're looking for ways to do something better, when in reality I suspect that "trying to do something completely different" is actually likely to be far more profitable and productive.

I think Matthew's and David's posts above ought to help you, also.

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  #7 (permalink)
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Dayton, Ohio
 
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xplorer View Post
On Crude such movements can be quite the norm. Especially so close to fundamental-driven events such as OPEC meetings.

Do you trade 10-20 contracts live?

Thanks for your response. Yes, I trade live.

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  #8 (permalink)
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matthew28 View Post
As soon as I read somebody is trying to scalp for five or ten cents on crude I assume they have been reading the Scalper's Journal thread and seen how easy it is to make a grand a day with the lure of a psychologically comfortable high win rate and making money almost every day. Then tried it and found it isn't quite so easy after all. Scalping can be easy for a day or two for a lot of people but trying to be consistently profitable doing it is very hard. There are always exceptions who do it well, but they will have done it enough and know their chosen instrument well enough that despite having their charts etc I suggest that they will be trading almost completely instinctually when going for such small moves, not just for when to enter but for scalping the almost more important knowing quickly when to scratch or not take the trade in the first place.

There is nothing wrong with your chart setup if you are happy with the indicators you are using. There are no special indicators that will tell you what is going to happen in the future. You just take your most educated guess/probability based theory/indicator setup, and then take the trade with an acceptable risk, acceptable even with slippage. Crude has a reputation as a trending instrument It can easily push 50-100 ticks when it gets going, and when it is being pushed the further it goes the further it wants to go, until it runs in to a big enough wall of absorption at which point the momentum traders get out and price runs the other way. It is an auction price runs from one level of liquidity to the next, with crude those areas can be far apart.

If you were trading 10-20 contracts live and it is too stressful for price to move quite normally then you are trading too large for your account. As you say you are a beginner I assume you are actually sim trading. If you are then I would respectfully suggest you cut your size down to an equivalent of what you will be able to trade when you start live. Otherwise you are just wasting time on a daydreaming computer game. If you spend a few weeks making a packet with unrealistic size then go live with one or two lots you wonít be happy making such small amounts compared to how much ĒmoneyĒ you were making every day in sim and unless you differ from the norm you will be doubling down and taking excess risk before you know it, followed by stress and large losses. Finding a trading method you can do calmly and realistically for a while in sim, so you trust your method and tools, and then go live and do exactly the same thing.

Thanks much for your reply. Iím trading real money, not a sim, and have a decent amount of screen time.

I struggled to figure out whether I should call myself a beginner or intermediate, but chose the more humble and accurate designationt, especially in comparison to the long-timers here.

Yes, I can see the momentum and eventual absorption (though I didnít know those terms), so evidently those are the proper terms for the runs up or down - but am disappointed that thereís no way to sense their imminent arrival!

Do you think that some sort of depth of market indicator might be helpful to me?

Thanks again.

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  #9 (permalink)
Elite Member
Dayton, Ohio
 
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DavidHP View Post
I have not found many indicators that will consistently predict the future.
(Crystal Balls are rare)

If you want to trade this type of move you need to have the screen time to know such a move is coming.
I suggest many years will be needed to do this.

One way (but not the only way) to gain an edge is to 'read' the tape/dom.
Futures.io has several videos of this type of trading.
One such method is No BS Trading.
There are videos on Futures.io and here : No BS Trading Videos

For new traders, trading in this way is extremely difficult and takes a lot of experience to master (IMO).

Good Luck with your journey.

Thanks for your reply. Though I hadnít yet read your reply, wondered about a DOM indicator. Iíll definitely look into it.

Thanks for the video suggestions. Iíll watch them.

Finally, yep, Iím building up my screen time, and have already had some hard and easy lessons because of it.

Thanks again.

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  #10 (permalink)
Elite Member
Dayton, Ohio
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: GC, CL, Eurodollar
 
Posts: 15 since Nov 2017
Thanks: 7 given, 4 received



Tymbeline View Post
Please forgive me for commenting (with helpful intentions!) that in my opinion, especially in the context of CL, this sits very, very uncomfortably indeed with the words "Futures Experience: Beginner" beneath your name.

Again, I don't mean it to sound as disparaging as it might, but I can't help wondering whether you might perhaps be asking a "bad question", here, because you're looking for ways to do something better, when in reality I suspect that "trying to do something completely different" is actually likely to be far more profitable and productive.

I think Matthew's and David's posts above ought to help you, also.

I couldn’t quote properly, so I’m sorry for not quoting your reply as posted.

First, I greatly appreciate your reply, tact and sensitivity - and take no offense (or offence ).

I think I understand where you’re coming from, but rest assured, I didn’t start with CL, it’s just where I am now.

I have built up from trading one lots to mostly ten to fifteen, with an occasional twenty.

I don’t understand what you mean by “better” vs “different” and would much appreciate more details/thoughts on that subject.

Thanks again. I really appreciate your thoughtful reply, and will diligently follow up on all suggestions.

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