CL Redux

covering shorts 88.33. Still may do the 87.50 but employment numbers tomorrow could bring some fireworks in all markets.

 

Nice trades Star. And obviously the employment numbers tomorrow may likely have a big effect on where the market's are headed like we've said. Also DX continues to rebound which will put more pressure on crude if it continues. http://www.barchart.com/chart.php?s...ddindicator=&submitted=1&fpage=&txtDate=#jump

 

Had a nice text conversation with a CL trader. I went long wheat overnight, and it was a bad losing trade even though my understanding there is a droght.

Was able to scalp my way back to BE today. I guess ES trade was not really a scalp did 2 contracts and took around 2 points. Was planning on taking 2 points and then 4 points, but my 6E long also made money.

Per my conversation I say my resistance and support pivot levels were incorrect and redrew them. I should have also waited for confirmation on my indicator and gone for 20 ticks instead of 10 ticks on 1 trade.

 

Here's the Mercenary Creed from their website.

http://mercenarytrader.com/

Mercenary Creed

I. Thou Shalt Heed the Price Action.
II. Thou Shalt Respect the Risk.
III. Monitor Thy Equity Curve.
IV. Thou Shalt Go For the Jugular.
V. Thou Shalt Focus on Making Money.
VI. Thou Shalt Go Short as Well as Long.
VII. To Thine Own Self Be True.

I. Thou Shalt Heed the Price Action.

The seasoned trader knows that “prices move first, fundamentals come second.” Conviction is my ally, intution my guide — yet only price confirms and validates. I know that charts, in essence, are simple abstractions… a complex interplay of forces, reduced to two dimensions in a tightly defined space. As a Mercenary I walk the middle path, heeding price action without deferring to it.

II. Thou Shalt Respect the Risk.

When I was a child, I traded as a child, not giving proper respect to risk. But now I am a Mercenary, and so now I trade like a Mercenary, giving risk its proper due. My trading capital is my life force; like an aviator’s fuel or an ocean diver’s air supply, I shall monitor it with passion and precision. First I shall survive, for only then can I thrive; as Sun Tzu instructed, I shall wait by the side of the river for the bodies of my enemies to float by. In respecting the risk, I shall continue on as my enemies falter… and in surviving my opportunities shall multiply.

III.. Monitor Thy Equity Curve.

The Mercenary respects the wisdom of his forebears. As such I pay heed to the oldest wisdom of all: When trading poorly, decrease risk and exposure; increase risk and exposure when trading well. I will maintain a constant vigilance over critical aspects of emotion and performance: How I am feeling; how I am trading; how attuned I am to the rhythm of the market; and, most vitally, whether my precious capital reserves are waxing or waning. In this I shall trade at my biggest when doing my best, trade at my smallest when doing my worst, and prosper through the great long stretch of days.

IV. Thou Shalt Go For the Jugular.

In monitoring my equity curve I shall ‘earn the right to swing’. Like Babe Ruth I shall retain the capacity for grand slams; like Ted Williams I shall “wait for a good pitch to hit.” When profits are strong and opportunity is great, I shall emulate the palindrome and maximize my good fortune to the hilt. The gambler takes foolishly outsized or unwarranted risks, while the grinder stays forever miniscule. As neither gambler nor grinder, but Mercenary, I shall trade patiently and carefully at all times, respecting risk all the while… and then, when the time is right, I shall take a defined portion of my gains and knock the #$#@ing cover off the ball.

V. Thou Shalt Focus on Making Money.

The fool cares more about being “right” than making money, and cocktail party glory is the soothsayer’s deep desire. I leave such foolishness to the chattering classes, cultivating instead a ruthless focus on making money. I shall feel no attachment to the “big call,” no hesitation in the urge to change my mind, and above all else no love for the position. Ego is indulgence and indulgence costs money; for the Mercenary, to be “right” means nothing while profit means everything. P&L is my Alpha and Omega, risk-adjusted return my northern star.

VI. Thou Shalt Go Short as Well as Long.

The Mercenary embraces that old trading truth, “There is only one side to the stock market… not the bull side or the bear side, but the right side.” As a flexible market participant, I shall cultivate the talent and the temperament to prosper in all market environments — up, down or flat. I shall transcend the tyranny of the “long-only” mentality, and shut my ears to institutionalized helplessness. I shall know the mountains and the valleys, going long or short with ease — always remembering that “the wolf careth not, how many the sheep be.”

VII.. To Thine Own Self Be True.

As Polonius instructed Laertes, I so instruct myself: “To thine own self be true.” The Mercenary lives unburdened and unyoked, free from troublesome earthly masters; I take my living from the markets as a fisherman takes from the sea. I will embrace this extraordinary freedom, and with it an extraordinary responsibility… the responsibility to live life to its fullest. I will travel where I wish, do what I choose, live in the manner I see fit, and support the causes near and dear to me; in word and deed I shall be free, an encouraging example for my fellow men in chains.

 

BCE, thanks much for that entire post, just superb!

I spoke with a trader today who asked me to point out a "perfect trade" on today's chart. I pointed out an early "high probability" short opportunity, including my stop loss price and the price where it would make sense to to add to the short position, a level that was 17 ticks lower than the initial entry (adding to a winner). This trader understood the logic of the short entry quite well and mentioned he would add to it at a price 15 ticks higher (average down at the price at which I'd place my stop loss).

I said that I'd have a DOUBLE stop at that price, taking me out of my short at a 15-tick loss and entering me into a long position at that same price. I said, "I'd be long at that price in a heartbeat if my short entry failed."

Because the price action at that level would indicate that the bulls regained control and the technical level at which that would occur in this specific case frequently results in VERY bullish follow-through.

I told him, "If you ever average in at a place like that and get killed, you know why now."

This is by far one of most beneficial skills I learned in the latter half of 2010. I'm sure anyone following my trading on ET knows what a powerful bias I had in my trading. I started early on (pre-ET) with pure long bias, which worked great because my bias was in alignment with the overall market, but started to hit me hard when the market turned down, seriously down. Then I learned to finally flip my bias in alignment with the new bear market and did well for a while, but was unable to flip the other way again when the market reversed back to the upside. Finally I realized that, as a day trader, I need to be ready to flip my bias at any moment in time when price ("the market") tells me things are changing, despite fundamentals, news or whatever else I think is in play!

 

Good Morning. Got up early for the employment numbers. Let's see what we get. Could really move things.

Hard to trade these reports. It's so volatile and like today many times the numbers are mixed.

 

01/07/2011 08:30 *DJ DATA SNAP:US Dec Nonfarm Payrolls +103K; Jobless Rate 9.4%

 

DXH11 is up a little so far today but backed off it's high of 81.500.

http://www.barchart.com/chart.php?s...ddindicator=&submitted=1&fpage=&txtDate=#jump

 

You're welcome. Until I saw your post I was going to apologize for posting that here in the CL thread. Just always trying to share good things that I see. And I see lots of good things as I spend a lot of time online. I've taken quite a few online classes and I always post about 10 times more than the person that posts the second most posts. The teachers love me. I just like to share and try to help everyone. I want to see all of us do well.

And as far as flipping our trades, that's it. Just to observe what's actually happening with price action. We have some idea maybe based on fundamentals or TA or whatever and we try something and then we look. We dip our toe in the water and see. If what's actually happening is different than our initial take we just go with what's actually going down (or up as the case may be ) If you look at the price in a DOM you can tell a lot of times if the market's selling into any rally attempts or buying any sell off attempts. This is the pulse of the market.

Another thing is, one of my favorite quotes in regard to the market is from Jim Rodgers who said, "I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up." There's no need to trade every second. Just wait until it's more obvious and clear and then put on a trade and see how it goes. If you do that you'll maximize your profits and cut down on your losses.

 

short 88.15, target 87.50-