Started with a comment from a veteran trader in Elite Trader forum regarding 27th July 2011. An independent view of an expert witness (names withheld here)
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Wow! Unbelievable except this is CL so you never know. This morning it was under constant selling pressure. Someone was dumping it. And now someone is gobbling it up.
Trying Short @100.47. Not seeing any falloff.
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Registered: Sep 2002
Posts: 3056
07-27-11 02:41 AMI should be posting my breaks like you do ( ) Was just talking to a lady friend of mine and totally missed that huge move. Missed them all today on breaks. I was telling my friend this.
Oh, well. Keep your losses small and you'll do well. And days you miss
some action are no problem. There's always the next one. =========
P.S. I'd call today's action very unusual. Rallies and sell offs seemingly on their own.
ADD: FWIW when I don't feel like I have a good sense of what's up I just step to the side. No problem.
7-27-11 02:48 AM
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Great! WTG. Should have been more patient with my 100.47 short.
Maybe this will retest the LOD the way it's going.
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What happened to ME during this session
As the 15m chart is flat for 4 days , the i deleted the all emas as I thought as it was no used.
And I felt a litlte bit rusty of inactivity for 3 days...
I then looked at the 2min MACD K, and my eyes immediately saw a beautiful divergence of the moment. Once I saw the divergence I draw a line at the MACD and the line at the price . I concluded that was a Resistance line. So I put a stop order to SHORT. Yes, I thought the price will stop and reverse at that line. I forgot that a line is just a fence and the price could jump over the fence. So, this is the 4th time in this journal that I took a wrong position at the fence, on the exact line. So this is a risk faced by a pure SR line traders. It could make and could break. When I put the ema back, it clearly show that the trend at my short entry is up but it have no predictive power for the next action, it's only react . But probably the ema will keep me thinking on the validity of SR lines. I t could save me, but depend on what I want to see at that exact moment.
1 minute later my short triggered- that's a surprised to me because I expect a wiggling entry. The price move up, and my point of entry to short actually should be a second point of entry to long after a wedge pattern (1st point of long entry - not taken). My stoploss when its momentaryly gone up got me out at -90. The K line now was no more a divergence but gone to the oversold line.I failed to see that actually the the price actually reverse up to the base at the top peak before taking a dive.
Then CL dive down to the abyss......leaving me speechless as I take a breather.
Tactical Lesson A) When I see small frame during dead market.... dont forget to see the bigger chart. The big time frame is important to warn me for the potential of a big move out this dead market. To see this potential, I need the space. And this space only can be provided by big time frame.
Tactical Lesson B) The ema is a lagging indicator for the price. Maybe it is useful. The keyword is MAYBE
Tactical Lesson C) SR is good for staging an ambush but it didn't show the direction. It could be BACKFIRED as happened to me 3 times, recorded in this blog. It's helpful to think SR lines as the fences. The price could jump over it. I need a 2nd opinion indicator to check the potential direction. Once I know the direction, yeah, the potential is limitless :)..hey isn't trading is always about the direction...not the crappy price action ?
Tactical Lesson D) Divergence trading only for at extreme positions - Top and bottom and not in between. Use the big time frame eg 15 min for that. If I use a small time frame eg 2min. 5 min...that's not divergence trading, that's donkey trading. Like SR lines, I have been stung by DonkeyDivergence trading many times before...The sad part is not about the losers as it will be taken care by my trading partner Mr StopLoss, but the pains of losing opportunities of BIGBUCKS like today
Tactical Lesson E) Wedge pattern is valid. Yet, I always underestimate this because the price tend to be dormant before it goes wild and I dunno which direction the price will go after the wedge. DIRECTION again. May be a special order OCO entry useful here.
STRATEGY Lesson F) In big time frame chart, when you see a clear space (no clutters of SR lines) and market goes to the extreme point of top or bottom, prepare your mind that if you capture that move, you'll be richer than yesterday.
Report at this time : Consumer Confidence Report at 10.00 am
Hopefully I will read this post 1000times to make me remember this great day and benefits the lucky souls who also happened to be read this.
P.S. Imagine If I not distracted by that donkey divergence surely I will take the short at the beginning of the dive...hehehe...I know I know....Its useless to ponder it now...or If my account is bigger I will stay with that short and history is made. heee
