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CL is trying to find its footing after the floor dropped out on Friday afternoon. Based off the overnight downward channel, I'm interested in shorts around 45 and 45.40, and longs closer to 44.55.
We busted up through the channel and retraced for a bounce. Slight change in plans. I'm in long at 45.15
Got to +10 and pulled stop in a few ticks. Market turned, out for -16. I've revised the channel to account for the altered trajectory.
Back to the 5000vol chart. After another turn higher, I'm eyeing a possible new trajectory. The bounce short off 45.50 came too fast for me as I was typing, and I missed it. Could look at a long off 45.25. Perhaps a short off a sign of weakness around 45.50-60.
Alright, I'm in long from 45.28. Can't say I didn't try!
Sonofa.... that trade was poorly executed. Right idea. Entry too early, stop too tight. -14 and I'm done for the day.
Looking at the 5000vol again. Why did I choose to lean on the broken downward channel for a long? That is idiocy. I should be leaning on the upward channel which I was trading. Stop needed to be below 45.07. Needed to wait for a better price to enter. I missed a good trade, and a good idea, because of sloppy in-the-moment decision making. That upward channel is still in tact and yet I've stopped myself out of it... twice, actually.
I track a metric that I have dubbed JAEFE and JAEAE. (Just-after-exit-favorable-excursion, and Just-after-exit-adverse-excursion). They track excursions during the 15 minutes after I exit. Today, trade 1 JAEFE / JAEAE was 54 / 12. Trade 2 JAEFE / JAEAE was 69 / 5. THAT IS PAINFUL.
I knew the music would stop sooner or later. I practically asked for it. It was a tough read this morning. Tomorrow we'll try to get it back on track.
5:20am Zooming out a bit on the 5000 Vol, since we have a few different structures in play. The market is wrapped up around itself like a Matryoshka doll. I'll be favoring the Short side unless we see strength preventing 45 from breaking. There are a few good reasons to "wait and see" before taking trades this morning. The market has been calm for the last few hours, and it sits at a cross-roads. Another push lower to 44? A bounce to 46? And 45.50 standing just over us, a major inflection point over the last 2 weeks. I will favor the most recent move until broken, which is the steep downward channel initiated yesterday afternoon.
5:49am Zooming in on the 1000Vol chart, I see another tighter, steeper band within. Both of these channels have no upper bounds actually touching price action. I'm just duping the lower trend line for a parallel upper line. The purpose of these structures is to give me a proportional boundary around price action. They are hypothetical, and imaginary, but still they are useful to frame price movement. What this helps me say is that price is currently on its way down, dropping at a specific average rate, oscillating around a general trajectory around the median line of the hypothetical channel. Now watching a battle over $45 as expected. Possible short around 45.25? Not with out some further evidence. Will wait until after the floor open.
Took a short on a deflection of 45.55, but got pushed out very quickly. Now buyers are pushing the market into a new direction, it looks like. Thinking of a long off the same .55 level if I can get it.
Here we go. I'm in long.
Newp.
-14 and -16 today. Not sure what to make of this day. It doesn't feel like I made any obvious / glaring mistakes. I had identified some of those yesterday, and made an effort today to avoid the same types of errors. It is possible that the environment over the past couple days has simply been a bit messier, with volatility in equities muddying the waters . . . but I should be able to find a way to profit from it.
Should I have been more willing to take a long of of 45.00 early? I did call that out as a possible outcome this morning. Should I have been less agressive shorting off 45.55? I don't think that was such a bad play. It ended up being a very wide shakeout.
It could be that I'm making much ado about nothing. Yesterday's losses could be blamed on poor decisions, against my trading plan. Today I could have made better decisions, sure, but I don't think I totally went off the rails. I'll save the soul searching for another day and just commit to coming back tomorrow and take it one trade at a time.
Taking one last look at the 5000vol chart. There is one more way to look at today. The two-loss-daily-limit kept me out of one last trade. That trade, if I had the muster to take it (even if not, it's still something to learn from) was to flip flip back to the short side after it became apparent that the break through 45.55 was just a shake out. Perhaps getting short around 45.35 just before 7am, with a stop over .55.
am Looked back at my journal and tried to identify the things I was doing right, that may have slipped away this week. One thing that struck out is the simple analysis to start the day. Trying to distill the price action to only what matters the most. Remove anything that clutters the analysis. The other thing is to go back to looking for that little, tiny bit of confirmation that price is switching gears before taking the entry. I've watched enough PA have a bit of that sense, so I'll use it. I may miss some opportunities as price runs away from me, but I'm not too thrilled about getting run over by busses lately, so I'm going to finess things a bit. In the back of my head I already see myself changing over to QM in the near future so I can scale in/ scale out with same $ risk, and not have to be perfect with entries, but not going there just yet... still want to see if I can make this work.
The name of the game right now is 44.75. Will it hold?
Will look for a long with stop below 44.70.
A long with stop below 44.45.
And a short with stop aboe 45.50, maybe 45.40 if it looks really good. Nice and simple.
Per my initial plan, I'm in for a counter-trend mean-reversion long. Idea being market wants to get back closer to $45. Not pushing for a huge target here. If I get some favorable action here, likely to pull stop in rather quickly, since it is countertrend.
Hmmm. This one had a bit of life to it, at least. But once the floor opened, that was that. Buyers couldn't break the channel. I could have pulled my stop in and saved 5 ticks or so. Didn't. -17.
Maybe, jusst mayybe, I should turn off these countertrend ideas in my head? They've worked for me in the past, but lately I'm just not getting any love. At all.
That long trade maybe didn't have the greatest odds, but it wasn't crazy (I think). Or maybe it was crazy... taking a long in a steep downtrend. I'll consider it.
Now, do I look for a short, given that we've dropped below the floor of the market as I saw it? Stepping back to take a look... I don't think so. Now that the market has extended lower to 44.35, a retrace up to 44.75 seems likely before a possible push down toward 44. But with the inventory report coming in an hour all bets are off.
Unlikely I will take any more trades until tomorrow. Once again tonight I will be reviewing the last few weeks of journaling to see if I can determine if I'm doing something notably different that is "causing" my performance to slump, or if this is just a bad streak, or if I never had an edge to begin with and previous signs that I was "on to something" was just dumb luck.
Still, just a couple good trades away from turning it back around.
I've decided it was probably silly to go long where I did. Reading back over my initial analysis above . . . which I basically did follow with the long, stop < 44.45 - it doesn't make sense.
If the name of the game was 44.75, and whther it would hold . . . why was I interested in a long after it broke? Because I was looking at a down channel and projecting a primitive "bouncy ball down a hill" interpretation onto the chart. This was a market that had broken through key support and needed to find a proper footing before changing directions.
I've taken a lot of longs this week, in a market that has been steadily beset with selling pressure. The opens have come at awkward spots that appear extended and very tempting from the long side. But that hasn't paid off for me.
Not sure what materially I will do with this information, but I will digest it and see. Can't just rule out longs off of bottoms . . . but there is some piece of the puzzle I've not been paying enough attention to, so I will be thinking about that.
Woke up a little later today. Last night I spent some time looking at price action divided up into pit session vs out-of-session, and also looking at the opening bars of the pit session in relation to all the other action. It seems like this "context" may prove useful, and if it sticks I'll probably use some indicators to mark this in a less intrusive way. The circle on the far right is today's opening bars, so far. This is how I see it right now:
Yesterday's session closed near the lows, and the overnight session re-tested and bounced off those lows, forming an orderly channel retracing upwards.
Today's open is around the 43.85 level, which is above the previous days lows, but below significant consolidation range from 43.90 to 44.15.
If price drops below today's opening range bottom 43.70, I will take that as a sign that a continuation of the downtrend is increasingly probable, and look for a short entry.
If price travels higher but loses steam in the 44.05 - 44.20 area, I would entertain a short.
I will be very cautious with longs today, looking for strength to manifest solidly over the day's open range, and would prefer to wait for prices higher than 44.20, though that may keep me out of the market completely if it moves slowly.
As I am thinking about using QM in the future so that I might use multiple lots for scaling but still maintain similar dollar risk, I'm trying to envision how I might accumulate a short position from the OR-top, and build it up to 44.20, thesis being we turn lower somewhere in there.
On the nyse open, price shot to the 44.20 level and turned around as expected. I was too hesitant and it happened very fast, and I missed it. Price continues to respect this channel, back in the middle of OR. But if the channel breaks, and OR breaks down, that would be very bearish to me.
Well, I had a good idea, but didn't grab an entry and missed the fast 100 tick train. We've gotten a pull-back and I'm trying here with a relatively tight stop off 43.50.
That one didn't work. I'm trying it again here.
Had some good action on that, but it didn't run. At least the shakeout didn't end up mattering. Now we've pulled back to just below the OR and looks like it's ready to fail lower again.
I'm done for the day. After last week netting 42 ticks in 3 winning trades in 3 days of trading, this week I've had 0 winning trades out of 7 for a glorious -96. What a mess. -56 overall.
There is, as always, a silver lining. From top of this post: "As I am thinking about using QM in the future so that I might use multiple lots for scaling but still maintain similar dollar risk, I'm trying to envision how I might accumulate a short position from the OR-top, and build it up to 44.20, thesis being we turn lower somewhere in there."
My plan today was REALLY GOOD. I just didn't trade it. Why didn't I trade it? Hesitation, fear of loss. Pure and simple. This emotion compounds itself as losses accumulate. It is a viscious cycle... I do handle it alot better than I used to. I'm not in a foul mood. I know it's a loss my HEAD can accept — but how do I reset, and move forward? And how can I be sure there isn't some insidious undercurrent of self-sabotage, or something in my "heart" that just needs to be right and is afraid of being wrong. Well, just have to keep going forward and chip away at it, whatever it is.
One thing that may help with my hesitation / fear of loss disease? Trade a smaller contract and wider stops / scaling in. QM.
So, I'll think about it, but tomorrow I may switch over and test the liquidity in QM and adjust my charts to match the larger tick size and lower volume on QM.
I'm not entirely conviced I need to abandon what I'm doing here with CL ... Down 56 ticks, I'm still just a couple good trades from turning it back around. But I've been in similar spots before, and it's very hard to rebuild trust in yourself, in your method, when you have had 7 losing trades in a row, day after day after day. It's a recipe for the "yips". Maybe a little swing adjustment will do the trick.
5:30 am. Market primary trend is down over the last few days. Overnight session bounced up into significant resistance at 44.55. Could be coiling itself up for another attempt and a break up to 45 and change. Could fail the break and head back down to Friday's close.
Longs are counter-trend, and I should not take one unless a) we stabilize over the OR and over 45.50. Or b) we pull back to Y_Low and stabilize.
Shorts are with-trend, and I should take one with a stop outside 44.60 if possible. Or, if action off the OR looks weak, stop outside OR.
There is a housing market index report at 7am. I do not believe this is a major mover for oil, and I will trade as normal off the open, but hold back as we get 20 minutes or so from the report.
Of the two scenarios above, based off the strong action overnight, I think the bullish action is more likely. However, I will wait and see, and be appropriately cautious with that scenario.
6:40 am. Opening Range (15) was weak. Price retraced back over $44 and gave me an opportunity to get short with a stop outside the OR and also outside the upper channel line on the multi-day downtrend. Taking my entry in QM.
If this wasn't my first ever QM trade, I'd consider an add here: to average down.
Outcome was a loss of 11 ticks in QM.
I started a couple new things today. Obviously one thing is I'm entering in QM. Still using CL to drive my main charts though. I was able to take an entry without worrying about a stop 30 cents away.
Also, after reviewing trades last week, it seems I could benefit from a more objective decision-matrix for taking entries. I've tried to use something like this in the past, but always find reasons to abandon it, probably to my own detriment. Not going to go too far into the specifics of the grading criteria now — it's still a little foggy. Basically I took a page out of Elder's "Trading for a living" and created a "Tradebill" that has 5 criteria, each given a score of 0, 1, or 2. A perfect entry gets a 10, and the idea is to mostly take 8, 9, and 10 trades. Maybe a few 7s. Today's trade got a 9, although I could see dinging it a point more on Trend allignment (which trend was it alligned with?). Need to get more objective measurement on some of these.
Morning Prep and Clear of News: 1
Stop Placement: 2
Use noise to minimize price risk: 2
Trend allignment: 2
Room to run: 2
So, despite the outcome, I'll stand by the trade. One last look at the multi-day chart, entry / exit circled for reference.
5:50am. Here's where we stand heading into the open. Yesterday's pop was short lived and by the end of the day the market had given all of it back. Overnight we've pushed to new lows but the bottom hasn't completely fallen out. Looking like there will be some support over $43, or even $43.25, and those are the levels to watch at the open.
It is possible we are seeing a sideways range open up between 43 and 45. I'll watch for a long entry (countertrend but alligned with the thesis of a sideways range) only if we confirm buying interest exists over today's opening range, wherever that ends up being. Will be looking for a new upward sub-trend channel to start materializing above $43.50.
To the downside, similarly looking for weakness below the OR, but the extended move lower combined with potential support in the $43 area leaves me questioning the "room to run" on the short side before a pull back of some sort. That said, momentum is momentum. On CL the extent of a move can be surprising. From an ETH ATR perspective since yesterday's close, there is definitely plenty of room to run lower, since half of the latest move came during yesterday's session. I will favor the short side early, but it may be difficult picking an entry with a comfortable stop placement.
Note to self: I passed up a short oppotunity here at around 43.20. Price had tested below the OR 15 and bounced back up into the descending channel upper boundary. This trade would have been a 1 for Stop Placement, and a 1 for minimizing Price risk. All other scores would be a 2, making this an "8" trade that I past up. I didn't like going all the way to OR-top for a stop, so would have put it over OR-mid, maybe around .35. I think the main reason I didn't take this trade is simply the length of this down swing is over 150 ticks now and my primitive brain just thinks I should avoid shorting it. Could make an argument that because of the size of the downswing, the "room to run" category is a 1 instead of a 2. Making this a "7" trade. We'll see - maybe we ARE about to bounce up from this channel, but for now it's holding.
6:50am - Shook out lower and popped.
I took an impatient entry long here. I had been anticipating a pull back to OR-mid for an entry. I took the entry a bit higher than the OR mid. It was the right idea though. Finally getting some good movement on a trade. First time in a while. Original stop was at 43.20.
Morning prep and clear of news: 2
Stop placement: 1 (no clear channel boundary yet, and OR-mid is synthetic)
Noise and info/price: 2
With trend: 1 (countertrend, but morning action proved buyers were ready to take a volley)
Room to run: 1 (could have given a 2, but 43.76 was Y_Low and that was less than 30 ticks from my entry. Calling that a "1").
So this entry gets a 7. Let's see how it does.
Took a while, but finally got a winner. This trade offered many many opportunities to scale in. I am not doing any scaling yet, since it's a brand new concept and I'm still trying to get my feet under me after last week's drawdown. Happy to just make a good call today in a market that was not a straight-forward read by any means.
Zooming out one more time to the higher time frame. I could see some "advanced techniques" could have come into play here, with early entries long off the break out of the overnight down channel, maybe around 43.30, with another add on retrace back to 43.35, and again on the turn around 43.50.
As it stands, my 43 cents comes out to +17 ticks in QM.
