Welcome
back to CRI's ongoing Crude Oil Day Trading Blog.
We have officially rolled to the April Crude Oil Contract (CLJ13)
Price analysis you see (first chart & commentary) is
CLJ13, for the week of Feb. 15th - 22nd, 2013.
Each trading day (time permitting) a
15 minute chart is added and trades for that day are analyzed:
Market
Overview: After a torrid beginning to 2013 one ought not to be too surprised to see some weakness come into the market as it gets ready for the next round of political turmoil out of Washington. Interestingly, these recent 'tops' came in right at expected resistance zones suggesting this market is far more orderly in nature than what the day to day action would suggest.
Weekly
highlight: As for Crude Oil itself, this past week saw prices finally break the long established narrow sideways channel (98.50 to 95.50) that had dominated trade over the past month. Within two trading days the market repriced itself from about $97.50 down to $92.50. While further downside targets do remain (coupled with poor momentum readings) one might argue some sort of reactionary bounce ought to be expected from the rather dramatic plunge. While too early to declare a working bottom, a rally back into the 'brick wall' near $96 shouldn't be unexpected.
Trading
Strategy
(1 week): BoT (Break out Trades) I am very comfortable working with my
15m charts and playing double bottoms & tops for moves to either 50%
levels or OTE sweet spots. Ideally BoT entries come at or near hourly
OTE ss levels. The key with BoT's
of late seems to be to only enter a position on a touch of the 13ema
following the double top/bottom. Most trades take less than 10 ticks of
heat and easily move +30 ticks in the trend's favor. So with this in
mind, my trading strategy is to concentrate on BoT entries at or near
hourly/4hr OTE levels. I want to focus on 5:30AM to 8:30AM trading
window and take every setup that occurs during this window of time. That
is my #1 goal for this coming week.
Here is a really nice example of one of my BoT trades, how it should have been executed and what I did.
What should have been done (Notice):
1. The origional double bottom in price confirmed by momentum & volume (96.95 area).
2. The 13ema touch 7 bars (1 3/4 hours) later - buy at 97.10 AOCO (-15/+41).
3. Trade took less than 7 ticks heat.
4. AOCO +41 would have been filled next bar.
result: quick trade for relatively little risk
What I did (Notice):
1. I bought on late reaction & subsequent breakout (97.27).
2. Which was far away from the 13ema = poor trade location = mistake.
3. Which led to panic on realization.
4. Which led to getting out at small gain on 200 sma touch at 97.40 (+13).
result: I took 13 ticks when there was easily 40 or more for the taking.
So what can I take from this review?
1. I have confidence in my 'edge'. I believe.
2. I understand the mechanics of the trading process with appropriate risk/reward levels.
3. I understand my daily risk tolerance (3x15 tick strikes and you are out) and am happy working within the model.
4. I have NOT committed myself to my trading plan. I must commit to it to succeed and this is were I need work.
As stated last week: I want to focus on 5:30AM to 8:30AM trading
window and take every BoT setup that occurs during this window of time. That
is my #1 goal for this coming week.
Mental
State
Review: This past week was a poor showing for me. As pointed out in last week's blog, other issues are dominating my personal life right now so it is very hard to commit the time and mental energy to trading that I would like (and really need to) to be successful. I know this is a long road and there are no easy short-cuts to learning how to trade properly. So with that said, I am committed to the task at hand and will endevour to work through personal problems and not let it effect my trading.....(wish me luck...lol).
Trading Plan:1. BoT (momentum):
Determine both upper and lower OTE ss entry points on higher time frame (Daily/4Hour/1Hour charts). Find
price breakout (typically double bottom/top) confirmed by momentum &
volume on 15 minute chart at or near these higher time frame OTE ss
entry points. Calculate realistic targets (50%-70.5% retrace into VProf
'Claws'/ma's/gaps on higher time frames). Monitor 13ema on 15 minute
chart for entry levels once the breakout has occurred. Look to enter with
the prevailing trend (BoT) on touches of the 13ema. Regardless of how
long it takes, I can only take a BoT position on that condition. All
orders should be entered as AOCO (-15/+41). I can only consider moving
the actual stop at +30 (or opposing Keltner band touch). Goal for the
week is to 'try' 1 trade per day that meets BoT criteria.
2. ORT & 7RT (time frame range trades):
I
will prepare as usual for these daily setups. After about a month of
'forcing' myself to take every setup I have come to appreciate the
model, its potential, and its risks. As mentioned above, I will continue
to follow the model and indeed take positions, but not if they argue
with either a significant counter OTE ss level (meaning the market has
moved to a dramatic extreme) or if it is in the face of a prevailing
BoT.
That's
all for this post,
Brian Beamish FCSI
The Canadian Rational
Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/
Welcome
back to CRI's ongoing Crude Oil Day Trading Blog.
We are within official 'roll' period for day traders - Now in March, 2013 contract (CLH13) will be moving to April, 2013 Contract (CLJ13) this week
Price analysis you see (first chart & commentary) is
CLH13, for the week of Feb. 8th - 15th, 2013.
Each trading day (time permitting) a
15 minute chart is added and trades for that day are analyzed:
Market
Overview: While pre occupied on another project I have admittedly let my futures trading and this blog take a back seat. Interestingly, I am on the last day of my most recent combine and have (in very typical fashion) about a 1% return on assets over the 10 day period. As long as I continue to post positive trade balances, the good people at TopStepTrader will let me continue to roll my combines at no additional charge. Now that the project has been basically finished, I can once again concentrate on this (and my other free blogs) in earnest once again. As was pointed out in today's CTS, it seems to me the market is in the process of shifting money out of Japan and back into Europe. World economies appear to be on the mend as long term interest rates have begun to move higher of late with surging stock markets. As pointed out in my most recent SPY blog entry, one shouldn't get in the way of bull markets as you just might get run over. With that in mind, there really is no telling where/when the market will run out of steam but considering the Yen has now entered an oversold condition on a weekly basis (a rare occurrence in itself) some sort of short term reversal shouldn't be too unexpected.
Weekly highlight: Crude oil prices have basically gone sideways since the end of January in what can currently be only considered a range bound market. Is this a mid-point consolidation (suggesting much higher prices) or the beginnings of a medium term top (suggesting lower prices)? The 1st 2wks Q1'13 Study suggested energy would see net inflows for the quarter and the January Barometer suggested the market should have a positive tone to 2013. But neither of those studies guarantees a straight line move up or down. Until this range is broken $95 to 98 in earnest, one has no choice but to look to either buy or sell extreme range touches. !5 minute turns near $95 ought to be bought while 15m turns near $97.50 ought to be sold.
Trading
Strategy
(1 week): BoT (Break out Trades) I am very comfortable working with my 15m charts and playing double bottoms & tops for moves to either 50% levels or OTE sweet spots. Ideally BoT entries come at or near hourly OTE ss levels. The key with BoT's of late seems to be to only enter a position on a touch of the 13ema following the double top/bottom. Most trades take less than 10 ticks of heat and easily move +30 ticks in the trend's favor. So with this in mind, my trading strategy is to concentrate on BoT entries at or near hourly/4hr OTE levels. I want to focus on 5:30AM to 8:30AM trading window and take every setup that occurs during this window of time. That is my #1 goal for this coming week.
Mental
State Review: I was relieved to finally finish the project that took me away from the market for the better part of a month. I feel refreshed and focused on the task at hand. I have one day remaining on my current $30k combine and shall finish that Tuesday (Monday is a US holiday) and then start in on a new one immediately after.
Trading Plan:
1. BoT (momentum):
Determine both upper and lower OTE ss entry points on higher time frame (Daily/4Hour/1Hour charts). Find
price breakout (typically double bottom/top) confirmed by momentum &
volume on 15 minute chart at or near these higher time frame OTE ss
entry points. Calculate realistic targets (50%-70.5% retrace into VProf
'Claws'/ma's/gaps on higher time frames). Monitor 13ema on 15 minute
chart for entry levels once the breakout has occurred. Look to enter with
the prevailing trend (BoT) on touches of the 13ema. Regardless of how
long it takes, I can only take a BoT position on that condition. All
orders should be entered as AOCO (-15/+41). I can only consider moving
the actual stop at +30 (or opposing Keltner band touch). Goal for the
week is to 'try' 1 trade per day that meets BoT criteria.
2. ORT & 7RT (time frame range trades):
I
will prepare as usual for these daily setups. After about a month of
'forcing' myself to take every setup I have come to appreciate the
model, its potential, and its risks. As mentioned above, I will continue
to follow the model and indeed take positions, but not if they argue
with either a significant counter OTE ss level (meaning the market has
moved to a dramatic extreme) or if it is in the face of a prevailing
BoT.
That's
all for this post,
Brian Beamish FCSI
The Canadian Rational
Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/
