I remember reading an article as oil was hitting the 140's about how traders were buying up large quantities of distant contracts (2015 I believe was the big mover) assuming oil was going to top $200. Now, oil may very well top $200 by the time those contracts expire, but could you hold through that drawdown? :eek: Timing is everything!
Wonderful post yourself. As far as "This is where nervous traders grab their 15-20 ticks, call it a trade, then whine when it runs further without them." The first part did describe some of my trades on Friday. Being new to trading this contract and considering the volatility this last week, especially the last few days, I was happy to scalp it and get what I could. And there was so much backing and filling I didn't want to have it retrace the whole move back to my entry which it did several times. The other thing is, it didn't necessarily seem to be reaching "key levels" which were "still cleanly in play". Remember your post?: I thought about this more yesterday and today, as far as strategy goes. The way it's trading I'm tempted to take the 20 tick profit and then immediately reenter on a 10 tick pullback maybe, in certain situations. This is difficult of course and you need to be really on top of it and quick. Not sure how well this would work. And of course if it pulled back 5 ticks and then broke much higher you'd miss it. It moves so fast. But there was one trade where I entered, wherever it was, and I could see it just stall, and in retrospect I should have just checked out right there or maybe moved the stop up to a 5 tick loss rather than the 10 tick loss I took. Another possibility would be to flip it, but that can be dangerous. Depends on the situation and where price is in relation to support and resistance levels. In this mix is my unfamiliarity, although growing familiarity, with this contact and how it trades, the super volatility lately, and also on the other side is my own trading experience just "feeling" the price movements in the SuperDOM. If you've traded a lot a lot of times you can feel and see price stalling out and get ready to pullback when it has been going up or get ready to just fall and selloff when it's trying to rebound maybe or hold a support level. Or getting ready to breakout. Or other movements. It's the pulse, so to speak, of price movement. As far as the "then whine when it runs further without them", that wouldn't be me. Not sure if you aimed that at me or included me in that meaning it as constructive criticism. Quoting myself: And This of course isn't whining at all. The sticking out my tongue emoticon gives this away. It's me acknowledging that I am learning to trade this contract and not being down on myself for not doing it perfectly. It's me saying to myself, "Great entry, but next time maybe give it a little more of a chance to move even more in your favor." I aim to have fun and not overly dramatize anything that happens. I'm happy when things go my way. Roll with the punches when they don't. And learn from both so I'll do even better going forward.
Exactly...I don't think anyone would argue the move both up and down threw the economy into the tank which we have only recently began to drag ourselves out of. Which is why I am hopeful the current powers that be realize they can NOT afford volatility in oil over several months. There is a lot they CAN do to stabilize the price of oil but it will take a cohesive (gov and private) and coordinated effort to do so. Obviously the oil traders don't believe they can! edit...sorry.. referring to ND post about timing
Exactly! GS I remember was calling $200 a barrel crude. Remember that? Glad I didn't short it at 32 with the thought "This can go to $16. I'll just give it time and not be shaken out of my position."
Of course another point though is Paul Tudor Jones said he had his greatest trading success and biggest profits at the points where the market turned. If you can just catch it right. Thought about this. Someone here, I remember but forgot, talked about entering trades again and again until they had it right. That might work. Small losses and then a staying-in-the-position, ride-it-for-all-it's-worth hold once you're on the right side of the trade. Turtle traders did something like that. This might work especially well on a counter-trend trade after an extended trend with a climactic parabolic blow off top or crash followed by a key reversal day. Remember we were talking about holding winning trades longer for greater profits a while back and still do today. I do want to work on that. It can and does make you a little nervous with all of the volatility lately and all of the market changing breaking news being released so constantly.
One other point FWIW, all of my trades were long on Friday. IV you had some nice shorts off of resistance levels. I was too chicken.
We knew you were referring to ND's post. Something that I thought about the other day too is that if this goes "too high" again there may well be talk of more regulation of oil traders. And talk of how they're just driving up the price on speculation, etc. And actually I'm already hearing that talk again. There's the risk premium aspect, etc. I hope they don't mess with us.
on Al Jazeera live the trailer is saying the US is considering tapping strategic oil reserves to counter the high oil prices. This is certainly an option but I didn't think the US would do it unless turmoil really got out of control. thoughts?
Al Jazeera speaks out of it's ass. The SPR is for an actual oil shortage we are flush with oil I bath in it No matter what happens all these countries will still produce oil, why don't these oil companies hire their own army to keep these neanderthals from interfering with business. That being said the market does what it does I just hope things don't get out of hand an ruin this business for all of us by causing some shoot from the hip regulations. Why doesn't China send some ninjas to go kill Gadhafi they can't be happy about this mess either?