First Trade : 80$ (my setup)
I missed a nice move around 9.40am. There was a clear resistance line at 81.56. Plus 81.55 was daily support line that became resistance as well. I saw that setup, but I had to go out. Breakout happened as expected. I was frustrated for missing that trade. Anyways, after that I saw an Inside Bar on 5 mins chart. Entered long at 82.06. First target was 7 ticks. Second target I exited at BE with 1 tick.
Second Trade : 20$ (my setup)
After some time, I drew support line at 81.81. Entered short at 81.79. Breakout happened but CL did not move quickly. I decided to exit with 1 tick on each target.
Third Trade : 140$ (my setup)
I missed another opportunity to short at 81.56 support line. Yes same resistance line before first trade became support. I was doing something else and did not have attention on chart.Anyways, CL did nice breakout again below 81.56. After missing rally, I pulled my second gun. I waited for small pull back around 81.12. Also 81.10 was daily support. I entered short at 81.09. First target of 7 ticks easy. Second target moved 10 ticks and started coming back, so I exited at 7 ticks. I should have waited more, it went for 20 ticks after that.
Forth Trade : -200$ (my setup)
This is called stupidity after 3 smart trades. I saw inside bar on 5 minute chart. My inner evil told me to take it. Result was stop loss of 10 ticks on both targets. Inside bar trade on 5 minute chart is not a good idea. It has more possibility of failure.
Fifth Trade : 110$ (my setup)
CL just didn't wanted to wait for me today. Before going to lunch, I noticed Head and Shoulder pattern forming on 5 minutes chart. I saw nice support line at 80.75 as well, thought about entering a short at 80.74. But then I did not wanted to leave my trade unattended. Plus it was lunch time, so decided to stay away. When I came back, CL already did nice break on support line exactly at 1pm. I was just 10 minutes late. Missed another good opportunity. Anyways, it was time to pull second gun. I waited for small pull back. I got it at 80.30. Entered short at 80.28. First target of 7 ticks easy. Second trailing stop I exited at 4 ticks.
Sixth Trade : 60$ (my setup)
After 2pm, CL started moving upwards. It was accumulating for end of day. I drew a resistance line at 80.49. Entered long at 80.51. But this time I made first target to 5 ticks only because of slow moves. Got it easily and then I exited second order at BE+1.
Overall it was not a bad day. If I remove one losing trade, it was a great day. If you are a newbie trader, you should study today's CL chart. You can learn a lot of stuff about price action in today's chart.
This week I could not achieve my weekly target. I did not trade 1 day and I had 2 ruff days. But I am still profitable. That will keep my confidence for next week. Have a good weekend everyone and happy trading.
Charts coming soon...
Last edited by safin; August 6th, 2010 at 04:30 PM.
The following 3 users say Thank You to safin for this post:
I just read this thread. I think we need a separate sub-section for CL traders
Regarding the inventory report: All you need to do is to take a look at the DOM 30 seconds before the news. It is very thin. If you look at actual prints you often see big gaps. What this means is that almost all techniques which involve price triggers will result in HUGE slippage.
From what I know, NYMEX does not support stop orders natively; they are actually emulated by the broker. This means that regardless of how good or bad your broker is there is a latency involved since the price has to trade to the trigger, your broker has to get that print, and then it sends the order. So there are likely tens if not hundreds of milliseconds involved and during that period a lot could have changed.
One way of trading the news is to find areas of congestion (support/resistance) above and below the market and have an entry order there, assuming the price will bounce of that area. CL report is just a news event which frankly has little influence on the intermediate term trend. I have seen CL collapse after a great report or rise after a poor report, after the initial knee-jerk impulse is gone.
The following user says Thank You to aviat72 for this post:
This is how I trade news. Sometimes it could give you lot of profit, but it could be a huge loss too. Depends on your style of trading and how large is your stop loss. For three setup, this is definitely a no no because it has bigger stops. For my style of trading this could be ok because my stops are usually smaller.
First Order : 80$ (Three setup)
Nice I/B at 9AM. Entered long at 81.51. Got 8 ticks easily.
Second Order : 0$ (my setup)
Right after IB exit, I saw resistance line at 81.60. So entered long at 81.61. But then CL didn't move for a while, so I exited both targets with 0 ticks.
Third Order : 80$ (three setup)
First Order I/B became O/B. Entered short at 81.34. Got 8 ticks easily.
Wow what a start in morning. 160$ profit in half an hour. But then slow market through out afternoon. I could not understand what was going on.
Forth order : -180$ (three setup)
I got O/B around 1.30. Entered short at 80.99. CL moved 6 ticks and then came back. Moved up and stop loss of 18 ticks. After that I came to know it was federal announcement at 2.15pm that kept market slow. Somehow News indicator did not show that news. So I thought I can trade. And result was a stop loss.
Fifth Order : 10$ (three setup reverse)
After forth order O/B, I saw I/B. That was a good place to reverse position of forth order. I did that and CL did not move for a while so I decided to exit with 1 tick. I should have waited for some more time and it was a winner.
From last two weeks, I am having some ruff time. I have lost my momentum a bit. This could be because I have become less aggressive and trying to take only high probability trades. Or it could be market that's not trending as before couple of weeks. Anyhow, I want to stabilize my method and avoid stupid trades. It's not very profitable, but it keeps me away from disasters.
I didn't want to post today's trades, but I will do it anyway. Total Profit : -420$ (5 orders)
First Order : 80$ (three setup)
IB at 9am. Entered short at 79.93. 8 ticks easy.
Second Order : 80$ (three setup)
Another IB at 9.30. Entered long at 79.87. Got 8 ticks easily. This also became outside bar. But I didn't trade it.
Nice start of the day.
Third Order : -240$ (three setup)
Outside Bar at 10.45am. Entered short at 79.49. Stop loss of 24.
May be I should have stopped here. It was a Federal Announcement day. CL started behaving strangely. I should have understood that from this trade.
Forth Order : -140$ (three setup) Inside Bar at 1.15pm. Entered long at 79.77. Stop loss of 14 ticks.
Fifth Order : -200$ (three setup reverse)
After forth order stop loss, I tried to be smart. I did reverse from stop loss point because it was also an Outside Bar. Trapped again. Stop loss of 20 ticks.
What can I say. Three setup is reliable if you know when to trade and when not. Because when it hurts, it hurts big time. I just blame myself for taking trades on big news announcement day. Learning hard way. May be I will have better tomorrow.
Charts coming soon...
Last edited by safin; August 10th, 2010 at 03:23 PM.
The following 2 users say Thank You to safin for this post:
It all comes down to this: if you have proof that your method has an edge, then your focus is on execution. There will be good days and bad days. With a large enough sample size, you should be able to factually identify any patterns in market behavior on certain types of 'event days' like inventories, fmoc, triple witching, etc etc etc. Your sample size should be generated solely from live trades, not backtested ones.
In my opinion, you are on the right track. Slow and steady.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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The following user says Thank You to Big Mike for this post:
really good job posting. It takes courage! Do not blame you too much, however.
If I look at your trades I would not automatically give you a low grade for taking the trades.
-> Did you follow your rules?
-> Did you execute the setups correctly?
-> Did you respect you stop losses?
-> Did you analyze the results?
I cannot answer these questions. But there are two things I would like to add:
Inside bars are low volatility setups. If volatility is low, price should explode in either way, when volatility picks up. This is an opportunity to make a larger gain, while getting away with a smaller loss. The way you traded today, your stops are further away than your profit targets, so you are heading for small profits (8 ticks and 8 ticks) and large losses (14, 20, 24 ticks). I am often running into this trap myself, so I know exactly what I am talking about. The low volatiliy setup suggests the opposite. Have a narrow stop loss and then trade the breakout from the current trading range.
My second point is that I do not think that low volalitility setups should be traded in either direction, but that further filters are needed to define a preferred breakout direction or to avoid trading altogether. This does not invalidate the setups, but I think they should be further refined by additional rules, which may result in fewer but higher probability trades.
Also I think that all setups can be traded on news days. I would not trade 5 minutes before and after the news announcements, because that is sort of gambling (unless you have carried out a specific statistical analysis of news events), but there is no reason to trade the expectation of the news. Actually today, volatiity was higher and it was a better day for trading than yesterday.
Personally I do not trade crude oil, because I found it too difficult to trade. There are reasons for this. If you take index futures, the market is dampened by thousands of stocks, so index futures cannot bump around erroneously without inviting arbitrageurs to trade against the bumps. The same applies to currencies as the market is huge and there is no central exchange. CL is really the most difficult instrument to trade. I have never traded CL with real money, although I know quite a lot about the oil industry.
And thanks again for your contributions via this thread. I am learning with you!
The following 3 users say Thank You to Fat Tails for this post:
Thank you Big Mike and Fat Tails for your inputs. This will help me. About larger stops and smaller profit target, I do know danger of this. But right now I don't have a large account. So I can not trade more than 1 contract for three setup and I need to skip runner for now. Also I can not afford more than 25 ticks stop loss. I am following three setup rules strictly. I do not want to modify stops because to do that I need more experience with three setup. And so far I had more winners than losers with three setup. So I still believe that it will be profitable even though there are few losers. I have seen that most of my losers are after lunch. Starting from tomorrow I would trade three setup during morning time only. No after lunch trades with three setup.
About trading CL, I agree it's very volatile. But that's the only instrument I was able to trade profitably. lol So for now I just want to stick with it.
The following user says Thank You to safin for this post: