Today's CL trades

I did not take any trades today.  I wrote yesterday that I would not take any counter trend trades and I stuck to this vow.  However, I was also unable to take trend trades too.  I had several sell signals after retrace, but I did not take any of them, because I found reasons not to. 

I was using the 5 tick Better Renko chart for my entry chart today.  I believe this is the best chart for seeing the RPM entries after a retrace.  I actually requested the RPM modification last year, in order to take these type of trades and it works very well with this chart.

As I said, I found reasons (excuses) for not taking these trades, which I have noted on the Renko chart.  Needless to say, in another down day, all these trades would have been successful, giving a minimum of 40 ticks per trade.

I cannot understand my reluctance to take these trades, except that I was afraid of being wrong.  Whereas, I never feel this way whenever I take a counter trend trade.

I was actually going to take a counter trend trade based on a squat bar from the 800 tick chart at the low of day.  Under normal circumstances, I would take this trade without hesitation, but today, I decided to be disciplined with counter trend trades.  Pity, as it would have been a very good trade with a possible 40 ticks.

Anyway, I will be taking the next 2 days off due to the US bank holiday and will be thinking over my problem of having to be right with trend trades, when this does not apply to counter trend trades.

Here are the charts:

Today's EOD analysis

After I had finished trading today, I reflected on the trades I had taken in  relation to the low volume/volatility seen today.  I thought that I had traded relatively well, but in hindsight, I really traded very badly.

Price was in a down trend all day since the London open, and coupled with low volume and low volatility, I should not have expected a reverse.  yet, the 3 trades I made were all counter to the daily trend.  I realise that the last trade was relatively successful, but I should have been looking for trend re-engagement trades whilst the volume remained low.

Having looked back on the charts, there were enough trend re-entries at good intra-day supply zones to have made this a good day, but I seem just to want to make reversal trades.  And I had already marked off the supply zones on my charts before price had retraced back to them. 

Maybe I am too much of a 'Mean Reversionist' to change.  I find it very difficult stopping myself taking counter trend trades.  And whilst I am taking counter trend trades, my mind is set against taking the trend trades. 

In an earlier post this month, I posted a link to another blog.  Where I read the most useful trading information I have ever seen.  The advice from 'Dr Joe' was - 'Buy when price is going up and sell when it is going down'.  The simplicity of this advice is to buy the dips in an uptrend and sell the rallies in a down trend.

I believe that my trading methodology should be able to achieve this, i.e sell at supply zones in a down trend and buy at demand zones in an up trend.  So from now, I will try very hard to not take reversal/counter trend trades until a new trend has been established.  I do not need to be the first person in a new trend.

I realise that this will be hard for me to do as I am a mean reversionist, but I am going to try very hard to accomplish this.  So I will use counter trend signals to exit trades rather than enter a trade.

Tomorrow is the Oil Inventories report day, and that should have an effect on volatility.  I believe the API report has already been publish and the data from it is very bearish for CL, so we may get more overnight down move.

Here are my EOD charts:

Today's CL trades

I took 3 trades today.  In a day where price has been in a down trend, I found myself taking longs. Very Strange indeed.

The first one was soon after the open, at a minor demand zone from yesterday's 2K volume chart, after I had seen limit buy orders coming in.  The trade went 20 ticks in profit, but began to stall, with limit sell orders coming in, but I was too stubborn and held on.  I was eventually stopped for 6 ticks loss.  I think the reason I held on was that my stop loss was quite small.

After this, I took another counter trend trade, but this time, I was only scalping to get back my first loss and got a quick 10 tick winner, from another minor demand zone from yesterday's 2K vol chart.  This trade would easily have given me a 30 tick profit if I had held on, but I entered it as a scalp, so I was okay with that.

The problem with taking counter trend trades, is that my mind seems to lock out trend re-engagement trades, and I declined 2 very good ones, both of which would have got 40 ticks profit.  The second would have got 60 ticks.  So, I really need to concentrate on trend trades unless I see a volume reversal pattern.

The third trade was from the very good demand zone where I took the long yesterday.  This time I entered with limit orders at the top of the zone with a 16 stop loss at the bottom of it.  If this had lost, then it would have been painful with 2 contracts.  I took a little heat, but the stop loss remained intact.

My target was at a supply zone from today's 2K chart for around 51 ticks.  I took a scale out for 16 ticks, to ensure that at worst, I would have a breakeven trade.  After price had retraced and gone back up, I moved the stop loss on the second contract to break even, as I believed, if it broke the recent low, then it would continue down and stop me out.

Anyway, price kept rising and I moved my SL up to 13 ticks.  However, after getting to 40 ticks in profit, price began to stall.  I did not want to get a measly 13 ticks out of the trade, so I moved the SL up to 30 ticks and was stopped out there.  At this moment of writing, price is just breaking through the stall zone, and will probably reach my initial target. 

I took 46 ticks out of that trade in total, so I am quite happy with today's trades.  However, I must really try and take trend trades, unless I can see a volume reversal pattern, or a S&D trade at a high probability zone.

Here are the charts:

Today's CL EOD charts

As stated in my previous post, I did not get to my trading desk until 2 hours after the open, so missed a great reversal signal on the open, which occurred at a very good demand zone that has held over the last several days.  I had left my PC running overnight with my trading platform open in order to record the GOM files for my Delta Divergence tool, as I really feel naked without it.

The opening volume on all my 4 intraday time based charts was also extremely large.  Which would have told me that something was going to happen.

Price had gapped down on Sunday's open from Friday's close.  This was based on the belief that a fall in price would occur, because of the agreement between the USA and Iran, regarding Iran's use of nuclear enrichment.  This may still occur, but today's volume looked to have suggested something different.

Over the last couple of weeks, price has been stuck in a relatively smallish trading range, and today, it opened at the low of the range.  Right away, there was a great reversal signal on the 21 Range and 2k Vol charts, and this is a trade I would have been interested in taking.  Even though it appeared counter trend, it was a demand trade.

Price pushed up very quickly and rallied around 100 ticks before consolidating.  later it retraced back to a DZ where I was waiting to buy.  However, I missed my optimum opportunity, but still took a 31 tick trade without heat, as it was a breakout rather than a retrace trade.  Not my favourite, but still very good.  Price did actually rally 90 ticks from my demand zone.

So, with today's extremely large opening volume, I expect a breakout from the trading base we have been in recently.  In which direction, I do not know, but I will continue to be patient and wait for the better S&D zones and just focus on CL and not get distracted by looking on the ES charts.

Here are the EOD charts.

Today's CL trade

I did not get to my trading desk until 16:00 GMT (11:00 EST), so I missed the very good up move from a Demand zone that has been holding over the last week.  And there was a very good buy signal on the 2K volume chart at the open with a reverse RPM bar showing limit buy orders, with price rallying 100 ticks.

So by the time I was at my desk, price was in consolidation, and above the VWAP, so I was not interested in a short and was looking for a long.  I drew a DZ from where I saw a very impulsive breakout from limit buy orders (on both 2 min and 2K vol charts) and waited very patiently for price to retrace. All during this time, I kept repeating 'don't diddle in the middle', which is what Michelle (one of the OTA XLT instructors) used to say all the time.  This was to ensure that I did not take low probability trades, and just wait for the higher probability one.

When price reached the DZ, I saw a very good buy signal on the 30 sec chart with a reverse CBO DD bar and instead of taking an at market entry, I used a limit order and this was not triggered.  So I missed out on a very good entry.  After this, price just kept going up, and I thought I had missed my opportunity, but then, price began to stall before a RPM break (on the 700 vol chart), and I took the buy here, over 20 ticks from where I should have taken it.

However, I got my target of 31 ticks in the end.  But It could have been so much better. So not the best entry, but my patience paid off eventually.  Also, I have not looked on ES chart, so I am not distracted today.

ES breaks the 1800 level

I am late posting this.  But better late than never.  The 1800 level was broken on Friday, as I had predicted the day before.  Price opened and pushed down into a great demand zone, before rallying all day, into the new all time high.

There was a great long entry around 15:30 GMT (10:30 EST) after price had broken above the opening 5 min range with a CCH bar, forming a demand zone.  After this, the up move was painfully slow on low volume.

I said on Friday to buy the open and to sell if we saw a very large volume 1 min bar.  The only large volume 1 min bar was at the close, but that does not signal a reverse.

We will eventually get a large shakeout, but I really do not have a clue when that will be.  Keep a lookout for some sort of buying climax, or large volume at unusual time of the day.  So keep buying until we see this.

Here are the charts:

Today's CL EOD charts

I did not turn my charts on until 17:00 GMT (12:00 EST) today, as I wanted a day off from trading.  Even this late in the day, there were quite a few trading opportunities and I was very tempted to take them, but I was disciplined and did not take any.

Yesterday, I noted on the charts  (21 range) that price was at a very important supply zone that had held several times when it has been tested.  Today, price opened below it and pushed up into it before falling around 150 ticks.  Pity I decided to take today off, as it was something I would have been looking for after seeing the large amount of limit sell orders at the supply zone late yesterday.

After the large fall, price recovered over 100 ticks, before falling away late in the day.  There was a great reversal signal at the low with a very good reverse HVC squat bar on the 800 tick chart and the largest 1 min volume closing in it's middle, followed by a impulsive up move, then a corrective down move. Pity I decided to take today off.

With not opening the chart until late, there was no Bid/Ask data from the Gomi tool to show if there was Delta Divergences at either the high or low.  So the charts seem strange and lacking information to me.  I seem to be very reliant on the data provided by the Delta Divergence tool.  It really has improved my reading of the charts and has helped with timing my entries better.  Also for seeing the better S&D zones.

Here are the charts:

 

EOD ES charts

I did not take any trades in ES today as the up move was a slow grind on low volume.  However, I spotted an unusual 1 min bar at 18.44 (GMT) with very large volume looking out of place.

The last time I saw something like this was back in May, just prior to a new all time high being made followed by a large correction of over 100 points (see my first post in May).

I am not saying this is going to occur again.  But if we break the 1800 level tomorrow with what looks like a buying climax, then, it may be time for taking a longer term short position.

So look to buy the open and sell the HOD if on large 1 min volume.