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Catching Big Waves - a trader's journal of surfing the the markets
I can't believe I missed that top that close, and did not have the balls to set my stop higher and walk away. I was tired, it was 1am or 2am, and I was freight training. But I was off by 5 ticks... (when I tightened my stop, I think the initial stop was to the tick of the high) That was somewhat irritating this morning, but it kept me on the short side today and it worked well for me.
"Every wave is a manifestation of a previous wave". That is all I have to go on. When 6E, ES and CL all came together to point to a top, or turning point, or just a small setback, or, possibly not even a pause... You never know. Major 5WMs do work most of the time though, for probably no reason other than they are easy to spot, and what moves the markets are the traders watching the charts. Some days, like today over the past 24 hours, I look at the charts after the fact and wonder why I did not sell hard at the W5 and demand that it prove me wrong. So easy to feel that level of confidence, after it happended.
The move down did not come easy, was very stubborn all day until 6E finally hit it's W5 prime target around noon, but then the move was on. When it broke the day's low, that was the signal I was needing. If it was going to go, that was it. And I was still scared to take the trade initially, went in short in 3s, 3, then 6, then 9... and then backed back out in the same fashion, not quite trusting to hold the position all the way. My chart is littered with ins and outs along the way, grabbing pieces then flat again.
Hit it again around 96.50 at 2:28ish, not my norm, but the 30 minute had it's own 5wm going on, and that was a great W4 high. Still did not hold like I should, W5 down around 95.55 I should be short still...
And now comes the tricky part.
What I have seen of myself, is I go through periods where my SR levels suck, and then periods where they are within pennies, times when I am in alignment wit the move, and times I am not. But after confirmation of such a major turn, I find myself looking for the same level of accuracy of where it will stop, where it may pull back to, and that approach can limit my ability to follow the larger moves. Spotting the 5W top was obvious, ES at the 618 after the move down with a LSP, that was screaming resistance... But now, has the market taken a major shift in direction, or is this only a small pullback in the grand scheme of things?
And I will never know, until after it happens. But, tonight I will once again wipe my charts clean and start over, believeing I will find some significant structure, expecting to win some and lose some, and occasionally come out with a win like today, but for the most part, just basically trade "noise"
This part is always a best guess - tthe horizontal lines labeled as RTH Daily were drawn in snap mode, but when I turn on 24 hour minute charts, they are often way off target. Which to use depends on which multiples of those waves got better reactions in the past.
One man's trash is another man's treasure... Choosing a timeframe and a starting point is so much easier on a daily than anywhere else. But on the 120, using the recent DB as a starting point, the first place I am going to watch for significant support is the potential W4 shown by the yellow line.
It happens, often. And we get back on the horse. Better to have your stop hit than not have one at all.
I went short last night, 3 contracts, stop at 98.30... the high was 98.29... BUT, I took one off and then moved my stop in... Who was sillier?
Correct stop placement is tough, and CL is a very good stop hunter. Had it been normal hours ( I really struggle with trusting night volume), my stop might have been much higher. But, the market could have also run much higher. It was a freight train trade, period, and those trades deserve to have their stops hit.
I try, and am not always succesful, to remember to say "thank you" when my stop gets hit, but it is a hard thing to do.
I assume you know what you are dealing with in trading CL? Please be careful if you are used to other markets. It is a very tough market to trade with small stops. That is why I do not trade anything else, not because it is easier (sometimes I wonder if I should move markets to something a little more tame) but to make sure I always stay on top of what it looks and feels like, and never confuse it with the motion of anything else.
But, if you hit the 98+ range with a short, great call. The real trade would have been with the triple top divergence, but I could not keep my eyes open. When price broke the low of that congestion area it should have been game on.
I was headed to bed when I saw the confluence of market resistance, and thought I would see if I could make it in a single trade, but I was a few hours early and had no patience.
