CL Redux

fewtrs · Oct 7, 2011

why did cl gap around 822 est????

Edit: nvm, nfp... but still, why does a gap happen? Can anyone explain that to me please?

fewtrs · Oct 7, 2011

Good Advice, thank you.

Quote from SteveH:

aquarian1,

It may help to think of your account as two piles of money...initial capital and working capital. Initial is what you start each day with and working is how much you've currently made for the day. With initial capital, only allow yourself to trade your normal contract size. With working, you can add to a winning trade or use previous winnings as "stop money" to fund larger initial entries.

For example, if you're up $700 for the day and your stop is 20 ticks, you can trade up to 3 contracts as an initial position if you want.

At the start of each day, you have $0 working capital so you cannot risk more than your minimum lot size. In your case, that would be 1 contract.

You can leverage up in any one trade so long as you will not allow your loss to grow worse than what you would be willing to lose in a normal trade. This will basically force you to get out at breakeven if, on your first add-on, you are down 10 ticks total (= standard 1 contract 20 tick loss). When you get good at adding onto a trade in a strong trend, esp. on the CL, you will find your chances of making $1200+ go up once you get past the threat of b/e on 2 positions.

If you follow these guidelines, it will be impossible for you to ever lose more than you smallest amount possible (in this case, $200) per trade if you are not trading well because you are still under the "initial capital" trading conditions. That's another way of saying that you confine your large account gains and losses to what you're able to achieve during each trading day. It takes money to make money so it makes sense to only risk larger sums of working capital when you have already proven that you're trading well for the day.

Another example. I trade 1 contract, catch a strong trend, add 3-4 contracts in that trend and I close the trade out with a $5000 profit. I stop trading for the day. The next day, my working capital is $0. I can only trade 1 contract again. The $5000 from the prior day was swept into the initial capital pool of money and that cannot use size to trade, only the minimum amount of risk I'm willing to take a trade and can only lose my normal stop loss amount.

This is how I manage my account. Just because I may have made 5K-10K for even an entire week, I must prove (to myself) through growing my working capital that I am enough on my game to be able to "get large" at any point during the day. I can emotionally handle losing $2000 if I am already up $4000 for the day, but I would (eventually) be an emotional wreck if I allowed that kind of thing to happen with initial capital.
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EON Kid · Oct 7, 2011

Quote from fewtrs:

why did cl gap around 822 est????

Edit: nvm, nfp... but still, why does a gap happen? Can anyone explain that to me please?
More...

improving employment Situation => improving economy=> increased crude oil demand my2c

fewtrs · Oct 7, 2011

The mini contract is a waste of time.. stick with the full contract.

Quote from Visaria:

I would say you are massively leveraged up. IMHO, you should be doing 1 MINI contract on a $30k acct.
More...

fewtrs · Oct 7, 2011

Thanks, I gather that much, but I'm more curious about the mechanics behind it, or how the orders were matched, and what the insides were here..

Quote from EON Kid:

improving employment Situation => improving economy=> increased crude oil demand my2c
More...

Picaso · Oct 7, 2011

Quote from fewtrs:

why did cl gap around 822 est????

Edit: nvm, nfp... but still, why does a gap happen? Can anyone explain that to me please?
More...

I don't see a gap at 8:22 in my chart. Do you have a chart?

(Intraday gaps happen because most traders/bots pull their orders from the book at the same time - usually before a news release, etc.)

fewtrs · Oct 7, 2011

Sorry, I was referring to the news gap. Thanks for the info!

Quote from Picaso:

I don't see a gap at 8:22 in my chart. Do you have a chart?

(Intraday gaps happen because most traders/bots pull their orders from the book at the same time - usually before a news release, etc.)
More...

EON Kid · Oct 7, 2011

10/07/2011 12:03 *DJ Fitch Downgrades Italy To 'A+'; Outlook Negative

schizo · Oct 7, 2011

+1

Well Stated. Thanks for your insight.

Quote from SteveH:

aquarian1,

It may help to think of your account as two piles of money...initial capital and working capital. Initial is what you start each day with and working is how much you've currently made for the day. With initial capital, only allow yourself to trade your normal contract size. With working, you can add to a winning trade or use previous winnings as "stop money" to fund larger initial entries.

For example, if you're up $700 for the day and your stop is 20 ticks, you can trade up to 3 contracts as an initial position if you want.

At the start of each day, you have $0 working capital so you cannot risk more than your minimum lot size. In your case, that would be 1 contract.

You can leverage up in any one trade so long as you will not allow your loss to grow worse than what you would be willing to lose in a normal trade. This will basically force you to get out at breakeven if, on your first add-on, you are down 10 ticks total (= standard 1 contract 20 tick loss). When you get good at adding onto a trade in a strong trend, esp. on the CL, you will find your chances of making $1200+ go up once you get past the threat of b/e on 2 positions.

If you follow these guidelines, it will be impossible for you to ever lose more than you smallest amount possible (in this case, $200) per trade if you are not trading well because you are still under the "initial capital" trading conditions. That's another way of saying that you confine your large account gains and losses to what you're able to achieve during each trading day. It takes money to make money so it makes sense to only risk larger sums of working capital when you have already proven that you're trading well for the day.

Another example. I trade 1 contract, catch a strong trend, add 3-4 contracts in that trend and I close the trade out with a $5000 profit. I stop trading for the day. The next day, my working capital is $0. I can only trade 1 contract again. The $5000 from the prior day was swept into the initial capital pool of money and that cannot use size to trade, only the minimum amount of risk I'm willing to take a trade and can only lose my normal stop loss amount.

This is how I manage my account. Just because I may have made 5K-10K for even an entire week, I must prove (to myself) through growing my working capital that I am enough on my game to be able to "get large" at any point during the day. I can emotionally handle losing $2000 if I am already up $4000 for the day, but I would (eventually) be an emotional wreck if I allowed that kind of thing to happen with initial capital.
More...

schizo · Oct 7, 2011

Quote from EON Kid:

10/07/2011 12:03 *DJ Fitch Downgrades Italy To 'A+'; Outlook Negative
More...

Their rating system is all fucked up. What the hell is "A plus"? What the hell is above A+?