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Catching Big Waves - a trader's journal of surfing the the markets
1:34am EST. My wife found an old photo of her mother and asked me to restore it for her. I've been working on it for a couple hours on the big screen, while watching crude on the two monitors to my right. The blue zone is more of an area for price to come out of than it is an area to make a decision inside of. It is struggling still, but has put up a fight so far at the 102 area.
I am expecting equities to come off hard either pre-open or open, but then not so sure. I am not that good at equities anyway. But this week I am watching for connection or disconnect between those and crude,and not with as much ambiguity as it may sound like. Crude is in a position where it may have both sides equally ready to retreat. Both watch areas are within an easy reach.
If volume would run constant I might never sleep. I sometimes watch crude's motion into the night, no trades, just watch, listen, empathize, understand maybe.
The initial reaction was favorable...but it is freight-training. Iam up 132 ticks on the day, short, got out at the 618 area 101.70ish, now want to see what this area does.
The buyers do not seem to care about my 99.40 zone, and seem to have congregated around the prior low pivot at 100.81. I would have guessed when that hit it would have given way to more downside than what it did, and was most surprised when the 2:30pm close not only swallowed all that selling volume, but did so enough to blow shorts back out.
The 240m is for future historical. Note the support at the minor prior breakout pivot at 101.07. But I still see major support at 98.99 - 99.46.
In this view, the secondary downward trendline is forming a bullish wedge, and a move above 103 could be the start of something big. I am still questioning the breakout failure today. I realize it may require another hit, but was expecting it to fall to major support a lot easier than it did, and paid a few dollars trying to prove it. End of day net up 108 ticks.
My 2-4 contract trading is getting a little more relaxed, but not enough to say I am comfortable yet. I am keeping my mind on the 21 day theory. I am not completely 2-4, and have been going in 1 here and there (like into the close today). What I have discovered is, when I drop back to 1 it is almost in slow motion.
I'm wondering if the support was more a function of the pit close, where obviously the winning hands were on the short side and may not want the concern of what could happen after hours, but true support still is further down? Or, is the interest at 101 real, we will see a breakout failure, and lookout above?
What news I know (very little, I'm sure) says that the supply concerns are somewhat contained right now. Not that they have anything to do with 99.40, and I'd take chart analysis over news any day without question, but that was impressive to hold this market up so well.
I noticed ES held at it's 786, and GC at it's 618. Not wanting any part of trying to find a bottom, natural gas just tucked it's tail and ran lower after yesterday's little bump up. Is there a weaker market? lol!
I should add that so far I am not seeing any great progress in my 2-4 contract trades. Just starting week 2, I am only net up $152.50. lol! BIG MONEY! Trying to fly, can't seem to get off the ground...
My win % has dropped considerably, as of today only 44%, but that does not bother me so much as I know I am abandoning trades way too quickly if they turn on me. Scared of heat at 4 contracts strong. Crude is so damn whippy, and being down $300 a second is nerve racking. And, my commission factor is through the roof due to such increased indecision. "Do I really want to be in this trade?" running somewhere in my subconscious is getting as annoying as "are we there yet?" every 15 minutes on a cross-country roadtrip.
But, the good news: my max win so far is $1,780.00 and max loss only $900, so that ratio is right at the minimum I am looking for and shows I am getting at least a little better at staying in when the trade feels right. That one factor, holding a winner long enough, is what I feel stronger about than anything else I have learned in trading. Fine tuning the correct place for me has varied a lot, and I would prefer to get back to 3 to 1 someday, but have found that a 2 to 1 ratio will keep me out of trouble most of the time.
I am really just not thinking about the money as it applies to P&L this month. I can't stop thinking about it in the the play-by-play right now, but even if I finish the month slightly down, it is a start into better things IF I can learn to relax into this new position size. So, tomorrow is EIA, and I try not. I just do.
