Sunday, September 29, 2013

Update for the week of September 27th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is the daily, weekly and 120 minute charts with Crude Oil's term structure and CoT summary for the week of Sept. 27th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:




Market Overview: In a stunning reversal, the US Dollar index has registered a violent bear ab=cd breakdown over the past two weeks. In recent comments, US Fed. officials have been far less hawkish on 'tapering' and as a result almost every world currency pair has benefited. Indeed, our two commodity proxies (the Cdn. and Aussie dollars) have shown particular strength suggesting international commodity demand is still quite robust. Additionally, European currencies look quite attractive after their long slide too. While many commodity sectors look a lot healthier, energy and grain prices continue to lag. In the former, Rbob continues to pressure that sector as we exit the summer driving season. In the later, historic US harvest numbers are understandably weighing on prices. Interestingly though, Cattle prices have hit their anticipated upside objectives and there are early signs of bottoming action in Wheat; both suggesting their respective sector trends may be soon drawing to an end.

Weekly highlight: With the market's focus back on the pending US debt ceiling vote, prices quickly retreated from their exaggerated levels coming out of the summer and through what I consider to be a complete distraction - Syria. Indeed, we now have a confirmed double top working on the daily charts (with the move through the significant lows of 103.74) and the breakdown also tripped up the weekly stop level (102.22). If not overtly bearish, recent weakness does suggesting internal weakness to the up trend. Considering the 2hr double bottom at the 102.20 level, my expectations are for a little bit of 'cleaning up' over the coming sessions. While I could see a further short term push down to test those lows, current resistance appears to be in and around the 105 to 106 level and I for one shall be watching the market's reaction once we reach that level for shorting ideas.

Personal journal: I have been trading my live/practice account like it is 'real' money for the past month and a half as I make my way through the transition from Combine trading to actually trading other peoples money in earnest. I wanted to get back into a 'groove' and over the past couple of weeks I have had steadily worked towards putting together weekly net gains. I am only now starting to feel comfortable considering trades on a real basis. As long as I keep to my rigid model/trading plan setups, I have relatively low anxiety and am comfortable living with the results. I am especially pleased at the addition of 'HVT setups' to my daily trading plan. These enable me to participate in 'range' days and seem to have a very high probability of success.

Trading Plan: For the week, my plan is to follow my daily trading plan and only take legitimate setups. Since my account is so small, I can only realistically risk 7.5 ticks on any one trade. So I must from now on, identify the setups (and their appropriate stop levels) and only put the trade on where I can risk 7 ticks (plus a half tick for commissions). This will greatly reduce my trading but because I have a maximum risk of $1500 and Rule #2 of investing says never risk more than 5% of your trading stake on any one single idea, $75 is the number I have to work with. I can be wrong 2 times in a row in any one given day and must shut down if I exceed $150 in losses.


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/

Screenshot of current '$30k' trading plan:


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