CL Redux

NoEmotions · Oct 5, 2010

Quote from Picaso:

- here's the kicker - the volume will be ok, since it's not IB's (aggregated).
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Thanks Picaso I liked the kicker part, Volume is not messed up.

startraitor · Oct 5, 2010

exit .50

Quote from startraitor:

short .90
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Picaso · Oct 5, 2010

Quote from startraitor:

exit .50
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Nice trading, Star - honestly I thought you were going to get burned in this last one, glad I was wrong.

BlueStreek · Oct 5, 2010

API Anybody?

I only caught that gasoline inventories down much more than extimated, I think Crude and distillates were more bearish than estimates.

Speciaul_K · Oct 5, 2010

Quote from BlueStreek:

API Anybody?

I only caught that gasoline inventories down much more than extimated, I think Crude and distillates were more bearish than estimates.
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Crude: + 4.442 MB

Cushing: Â¨+ 750 K

Gasoline: - 4.060 MB

Total Distillates: - 777 K

Refinery Runs: - 2.0 % to 81.6 % vs. 83.6 % from a week ago.

Crude Imports: - 750 K

dejavu8 · Oct 5, 2010

just had a look on Al Brooks' book, on p.386, Trading Guidelines, No. 39: "Work on increasing your position size rather than on the number of trades of the variety of setups that you use. You only need to make one point in the Eminis a day to do well (100 contracts at 1 point a day is seven figures a year)."

kingjelly · Oct 5, 2010

Quote from NoDoji:

Hi Walt, I appreciate that this thread has maintained its integrity all this time, focusing on actual trades, technical analysis at many levels and some help for those new to CL (it can be like learning to swim for the first time in rough seas).

CL has enough momentum moves each day that I'm willing to endure a lot of b/e stop outs to catch the runners, and avoid losses whenever possible. Yesterday, for example, I had 7 trades, all short, 3 scratches, and 4 runners, two 20's, a 30 and a 40. As a result of cutting any potential losers very quickly, but persisting until I catch some runners, I'm able to generate a profit on most days, as long as I put on enough trades.

If I put on a pure counter-trend trade (no confirmed price action signal, just a failed b/o or measured move pullback play), I move my stop to b/e after 10 ticks and sometimes even less. My initial stop has to be 10 ticks or less as well, or I'll simply wait for a with-trend trade or a confirmed reversal. A good counter-trend setup should reverse with enough conviction that you needn't risk much.

On a with-trend trade, I usually move my stop to b/e after 10-20 ticks, depending on how and where I entered the trend.

I often enter a trade at a pivot point on the break of a bar's low or high and as a result price very often returns to test that level, and shake out the traders (me) who moved their stop to b/e. That's why I have so many b/e trades. But I will quickly re-enter if it turns out to be a stop run. I try to get back in at the same price I initially entered. Often I can get back in there, sometimes I chase at a worse price and sometimes it just runs too far for me to feel that a survivable stop can be placed and I let it go.

A couple examples from yesterday: I shorted with-trend @ 81.77 at 10:27am ET, 15-tick stop and 81.42 initial target. I moved my stop to b/e after 13 ticks because the momentum was good, but was stopped out 81.76. Price only ran a couple more ticks and suddenly reversed. I jumped back in as soon as I realized the momo was on, but my re-entry was 81.60. I moved my initial target lower as price came in hard, then took it off @ 81.40 on the rebound. So moving my stop on the first trade prevented a potential loss, but cost me 17 ticks profit.

Later I shorted the micro-trendline break @ 81.89 at 11:53am ET, 15 tick stop, initial target 81.48 and possible retest of the RTH pivot low. Because price was above the 20 EMA and had been HLs and HHs off the pivot low, I treated this very much as a counter-trend trade and moved my stop after only a few ticks, because I was watching for quick follow thru on the break of the 20 EMA. It broke by only a couple ticks and I was stopped out b/e as the micro uptrend tried to resume. Price broke the previous bar's high, but only by a few ticks before pulling right back to the previous bar's close, where I immediately re-shorted at the same price as my first entry, 81.89, and moved my stop to b/e again after 14 ticks in my favor. Price came close, but failed to break that level again and I rode it down, through my initial target and took it off at target on the rebound off 81.42 for 41 ticks and my best trade of the day. If I hadn't stayed focused and missed that re-entry I would've been here whining again.

On my first trade this morning that was stopped out to the tick, I could've easily re-entered @ 82.21 which was a worse price but would've still provided over 20 ticks profit at target, but it was very close to the news and I didn't want to get stuck in a losing trade if price stalled or reversed at that point.

On breakout trades, I move my stop to or very close to b/e as soon as price breaks out, except in those instances where I decide I would like to donate 10 ticks to some nice counter-trend trader. I want to catch only those strong breakouts that run 20-100 ticks from the previous high/low and anything less isn't worth it to me. In fact, if it's a weak b/o, I'll counter-trend it.

So there is some insight into my somewhat hectic trade management, but it works for the most part.
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Hi NoDoji,

First, thanks for all the help you have given me with your insightful posts, your consistency is really amazing. Quick question, the way you trade CL with lots of BE trades waiting patiently for a runner, have you thought about how you will handle trade management when you start trading multiple contracts? Will it be more profitable to have a first target at around the point where you would move your stop to BE on a particular trade (~10 to ~15 ticks) that gets hit almost every trade and let the second run, or to have the both contracts on when you do get the runners?

Thanks,
Preston

NoDoji · Oct 6, 2010

Quote from kingjelly:

Hi NoDoji,

First, thanks for all the help you have given me with your insightful posts, your consistency is really amazing. Quick question, the way you trade CL with lots of BE trades waiting patiently for a runner, have you thought about how you will handle trade management when you start trading multiple contracts? Will it be more profitable to have a first target at around the point where you would move your stop to BE on a particular trade (~10 to ~15 ticks) that gets hit almost every trade and let the second run, or to have the both contracts on when you do get the runners?

Thanks,
Preston
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Preston, I've given this a lot of thought and had many conversations with my fellow traders about it and decided that for my particular trading style, I'm most comfortable all in/all out. I'm assuming the same fixed risk whether I'm trading 1 or 5, and I don't want to dilute my reward. If there's a lot of air space to the next S/R level and price comes in at a good pace, I may leave some on for MORE than my initial target, but I've made a firm decision not to scalp some of the position early. I did have a trade later today with multiple contracts and when it went exactly to my 20-tick target and turned around (unfortunately I didn't have a hard target in and missed the fill), I took off the whole position at 13 ticks because all I had to show for the day at that point was $6 and I was not about to let it evaporate. I don't want to make a habit of doing that, though. I really should've placed a hard target on that one.

startraitor · Oct 6, 2010

long .80

startraitor · Oct 6, 2010

target 83.10

Quote from startraitor:

long .80
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