http://af.reuters.com/article/energyOilNews/idAFN1430005320110114 NYMEX February crude options also expire on Friday and open interest stood at 10,537 at the $90 put stood and 3,384 at the $91 call and 7,443 at the $92 call, according to Reuters data, which could provide some gravitational pull and be a factor in price volatility during the session. ----------- So MMs are ready to pocket all these 20K crude OIL options money as 90% of options are SOLD by MMs and bought by retail traders ..
One really should be master of PA to have 11 BE out of 13 without a single loss. Did you use 15 ticks stop loss or increased it for todays action.
CL price action factors today. BULL factors: 1/ Brunt crude (ICE) expiring FEB contract today with $8 premium to WTI (US crude oil ) , especailly just today itself this spread increased by $1 so this is proving support for WTI oil price here in US 2/ stock market holding with positive earning from INTEL , JP Morgan etc. 3/ option ratio 3 to 1 will favor MMs to keep CL price above $90 just for this option expiry day. #of option contracts for $90 put / $91 call BEAR factors: 1/ China banking reserve increase 2/ broken Pipe line fix is in place by week end so crude will flow normal from Monday
Ended the day 12 b/e out of 15 trades, no losses. 15 ticks is my max stop, but often the stops are smaller. Because the volatility picked up with the new year, I now cross-reference the 3-min chart for stop placement and occasional early entries. I look to enter in the direction of price movement and in the direction of the trend (or counter-trend/new trend if a reversal signal appears). I will scratch trades several times in a row if 1) price moves 10 ticks in my favor and comes back to my entry, or b) it's a momentum play and the momentum fizzles out of the gate. Here's an example of my pre-market stuff to get an idea of why I have so many b/e trades: Eastern Time: 7:13 sld 90.15 7:18 bot 90.15 7:27 bot 90.19 7:48 sld 90.56 7:54 sld 90.49 7:56 bot 90.48 7:57 sld 90.49 8:01 bot 90.48 8:02 sld 90.49 8:06 bot 90.48 8:20 sld 90.37 8:25 bot 90.36 Paused at this point to evaluate the PA, stating out loud my observations: "What a POS!" I was talking with someone yesterday and describing some of my trades and how I enter and exit, and he said, "You're fly fishing," and I realized that's a perfect description of how I trade CL.
I wonder if these entries were from your lukewarm set up or your optimal set up? If you didn't exit b/e, would they go in the direction you expected?
I just addressed this particular trade in another thread, so here's my cut-and-paste answer: Before I trade each morning, I note S/R pivots in time frames larger than mine, specifically the 60-min and 1-day levels. CL found support Friday @ 90.10, and barely bounced. I took a quick look at the daily chart and saw that 90.10 was right on the rising 20-day MA. If it broke on the retest, decent continuation move down was likely; if it found support at, just below, or just above it, decent move up was likely as swing longs would initiate or add to positions. My 90.15 short was scratched when 90.10 held up for a double bottom following the strong downtrend on the 5-min chart, and I was long 90.19. My long was an early reversal counter-trend trade in the 5-min time frame, but a perfect with-trend pullback entry on the daily. Why I took it off @ 90.56: My initial target on the trade was 20 ticks (that's my minimum profit target and a standard target for me on counter-trend trades). 90.39 was a previous resistance level, followed by 90.50 and 90.64 (off the 5-min chart). When price got to 90.38 and hardly pulled back before coming back at it, I decided to target 90.50. When price broke 90.50 and moved barely a tick, I decided to target 90.64, but since we were approaching a 50% retracement of the entire overnight down trend (which can be rather formidable resistance on a counter-trend move), I then started trailing my stop 1 tick below the 1-min bars, and was stopped out @ 90.56. These 90.49 shorts were 5-min chart near-term counter-trend plays, but quite feasible with-trend plays off a failure to retrace more than 45% of the move from the overnight high to the pre-market double bottom. If price had broken through 90.64, I'd likely not have tried shorting, but since it didn't make it there, I worked the short side a few times. My first 3 attempts to short @ 90.49, if left on, would've hit the stop loss. My 4th try I waited for additional confirmation (break through previous pivot support), and that one also would've hit the stop loss if left on. If I placed a full 15-tick stop (my stop was 12 ticks based on previous R) and a 20-tick hard target on the initial short trade @ 90.49 and didn't move either one of them, my 20-tick target would've been filled 1 tick from that last pivot low before price went on an upward roll for the rest of the day. I was actually targeting a retest of the LOD on these trades, though, not 20 ticks, because of the initial resistance and then confirmed resistance near the 50% retrace level. Later I played more longs, but the day's price action was overall pretty ugly, what I would call a weak up trend with a lot of wide ranging moves in between.