Your correct, it's only one trading day. Also, I've never tested Light Crude Oil CL futures for trends, micro trends and strong directional price movements. Yet, I do see trend, micro trends and strong directional movements and range on your chart...range is the lesser that the others. Yet, you can post about 8 years worth of charts similar to what I typically have used in the past and if I have the time to go over each of your charts of CL futures...I can give you a more precise answer that would allow me to make a general statement about trends in CL futures. Mark
In the context of a 100% mechanical, objective system that blindly buys and sells based on MAs, I agree. When human discretion can be allowed to give context to a particular moving average serving as support, then they can be quite useful. "When X crosses over Y, then buy..." is bound to fail, as are all mechanical systems over time.
lol, let's leave it as is My point is only that diagonals work quite often, as do horizontal levels. I think discounting the significance of traders to respect either, in the appropriate context, would be a mistake.
Thanks... I agree. Also, I see a phrase you've now used that I will use for now on as in your explanation via the words diagonal lines in comparison to my phrase as 'rising/declining' line or trendlines. I understand. Mark
Josh, I draw horizontal S/R lines a lot with CL because the levels are tested so reliably and I like to have a visual reminder of where they are while I'm in a trade. It's like those dotted outlines of letters the kids use when learning to write
Here are a couple of channels I traded today. Took the trade on the first chart and one of the ones on the second chart. The first trade was pretty clear because it was a nice bull flag, we broke out, retested, and tested just below the pit open and came back to the little double top at .47, so I longed .48. On the chart below, I connected the top two points after it formed and went down a bit, and the bottom blue line is the parallel. Notice how the green line held (drawn from earlier lows at 11am), and price failed to reach the bottom of the channel. Then after the low formed at 13:45 or so, I connected those two points and the parallel is the upper red line. The long wick at 13:55 indicated a probable move up to the upper channel line, which happened by 2:15. Finally, when price reached the lower channel line 5 minutes before the close at 99.40, it was also a retest of the prior channel, and being near .50 and the daily mid, it was a good buy. Being this close to the end of the day I closed quite quickly for a small gain. I am showing the second one to illustrate how I drew the channels as the day progressed, and how I see the new channels forming.
Horizontal lines got some uses at the proper spots but the dynamic diagonals are far superior the comparison is not even close, the precision is not even close, the occurance is not even close. Takes a few more years of price action to actually visualize it. Less 20 EMA more lines THE Madman
I have traded USO which moves like CL/ 1 CL contract = 2,500 Shares of USO so trading 100 shares of USO represents a 25 fold reduction in risk (and profit) relative to 1 CL contract. The only drawback is that one must have at least 25K in their account to day trade the USO. I will start adding trendlines in the near future. Gabe