I shall leave these little lines and empty spaces with the following (by J. Welles Wilder Jr. who I shall always consider my mentor in spite of my never having met the chap):
“I know traders who can never seem to hang on and follow a good system because of a compulsive need for action. I know other traders who have a greater need to be right most of the time than they have a need for money they can make. So, if you have a method that makes money over a long term and has proved itself successful for you, then stay with it”. J. Welles Wilder Jr, New Concepts In Technical Trading Systems, 1978
I thought you were seeking something in addition to your core method, not a replacement? Something to add a little interest and income alongside an existing longer term approach?
But, either way, i also doubt that any kind of pivot trading, as a standalone, would achieve that!
But, in any case, whatever approach might seem promising, it is hardly likely to perform in the markets we are currently seeing! We cannot move the markets to suit our wishes!
But i understand what you are saying. Indeed, i haven’t changed my core trading approach since i first started trading. Only a few minor bits and pieces here and there, along the way. The biggest change being the inclusion of lower TF charts.
Definitely nothing to replace my core system (good analogy and description). Just something to take little bits here and there in the day was the idea. But not seeing it. And besides: no point in making 10% for a week with my core system and possibly losing five trades at 2% on another in the same period. I don’t have the luxury of having a margin for error right now. So all good.
The American Petroleum Institute (API) U.S. crude stockpiles release showed a further increase of 2.4 mill barrels compared with last week’s additional 8.6 mill barrels. Not a large figure but higher than the consensus expectation, which was apparently looking for a draw of around 600,000 barrels. Enough of a build anyway to push prices down deeper into last week’s range, but still above its mid-point. Note that the EIA’s own release is due later today and this often differs significantly from that of the API.
We have already seen two days of oil prices at the upper end of last week’s range but with no further progress on the upside in spite of the Middle East tensions. Maybe price expectations were also softened by comments from Saudi Arabia’s council of ministers stating their commitment to balancing global oil markets and preventing regional conflicts.
There was also ,in my opinion, a rather unusual and strange comment yesterday from acting U.S. Defense Secretary Patrick Shanahan, who said that while threats from Iran remained high, deterrence measures taken by the Pentagon had “put on hold” the potential for attacks on Americans. Since there were no further details, one is left pondering whether this was real or just a(nother) timely political or market- oriented comment.
Either way, we are still without a trend and I am still only looking for short spurts of around 50 pips or so. I didn’t manage to find even that yesterday although it did end up scraping at least a few green ones. These periods of consolidation can be really frustrating unless one is naturally only trading short term. But for any swing trader, who is naturally looking for longer tranches, these jittery price movements can easily lead to price chasing and a series of false starts and an accumulation of smallish losses.
TA status is currently neutral on Daily and 4H and now neutral/negative on the shorter end. Price is pincered between the 4H 200SMA above it and the Daily 200SMA below it.
We can see here on the daily chart how the uptrend that started at the beginning of January (after last year’s collapse) has clearly stalled since the end of April and has been in a consolidatory range during all of this month so far.
Just a little “something” in the “…and other stuff” part of this thread.
I just noticed that my broker’s home page is now stating that just over 73% of retail accounts lose money. I was surprised because when the ESMA rulings came into effect that statistic was slightly over 80%. That is quite a significant reduction in a short time!
That must surely be good news within the European jurisdiction but it would be interesting to know why. Some possibilities are:
High leverage traders have moved outside the ESMA region
Less small-size (and therefore more vulnerable) accounts are signing up because of the higher margin requirements
less interest in retail trading in general as a result of greater visibility of the risks involved
better training and information services from the broker
Either way, it must be a better trend for the industry as a whole,
Funny you should mention this. I notice the same thing every day. My broker’s stats. are 78% (UK registered and regulated). My other broker (when I say “other” it’s my original trading account from years ago which I have not used for years), EU registered and regulated, shows 67%. Assuming that these statistics are honest and accurate (and being very familiar with both brokers and their operations I’ve no reason to suspect otherwise) (and I’m sure those figures are audited nowadays anyway): it is very encouraging.
I honestly believe that you have detailed exactly the reasons for the far better than the average statistics.
There is but one statistic that I would really be very interested in seeing and that is the same statistics expressed as a percentage of those that trade FOREX pairs vs. those that trade other instruments (in particular equities and commodities) (and a further split between those two would be interesting too). I’m wiling to bet my entire trading account and future deposits into it that the percentages would be skewed considerably in favor of those that don’t trade FOREX pairs. I’ve actually requested the same on more than one occasion over the years but to no avail (and not rocket science to figure out why such statistics would be treated as state secrets).
I’ll tell you one thing for nothing: lower the leverage to the same as I get on equities and those stats would improve even more. Of that there is absolutely no question in my mind.
Regards,
Dale.
P.S. On a sidenote I just checked my other broker’s sister company. The sister company is also UK registered and regulated. Their stats are 71%. Platforms and instruments are IDENTICAL between the two brokers And interestingly enough: both offer more non-FOREX instruments by far.
The Energy Information Administration (EIA) reported a build in crude oil inventories of 4.7 million barrels in the week to May 17. This follows last week’s build of 5.4 million barrels. The report also includes a rise of 3.7-million-barrel in gasoline inventories for the week.
The market, which was already turning negative on the short term charts, sold off further on the news and has dropped into the lower half of last week’s price range. Now we will see where the underlying geopolitical concerns create a floor under the price…WTI 61,40 is my next level below here.
$61.40. Are you not just the prophet of doom!!! LOL!!!
Matter of interest:
I notice you don’t really talk about USD strength or weakness as it relates to or may affect the oil price. Not that it’s something I’m personally capable of factoring in. Just saw it on Gold last year i.e. Gold tanked but less to do with the speculative price and a whole lot to do with a rally in the USD at the time. Only loss I took the whole of last year if the truth be told. And my fault too. System would have had me realize a relatively small loss when this started and go short but cleverness over here just decided to stay long and keep adding on the way down. That was my last trade until now and this time around. Was so upset with myself it just wasn’t funny. Pretty much wiped out at least half of the year’s work and profits. Were it not for that this situation would not be so bad right now. Then again: were it not for the profits made before this happened this situation would be far worse.
Do you mean because it was such a bad call? We dropped straight through that level! Fortunately, I have never been too keen on the “catching a falling knife” type trades,or standing in front of express trains. I am not used to anyone taking any notice of what I write here - I will have to learn to be more careful!!!
I didn’t even get time to add my next levels at 60.80 and last week¨s low at 60.625 - but it seems we bottomed before reaching those (at least so far!)
I generally only trade oil from the long side and so normally I don’t do so well in falling markets and today was no exception. I sold at what turned out to be a great level - and then closed it far too early!
I now have a small first long position with a stop under the Daily 200 SMA which is at 60.31. It is currently in the green but I’m slightly uncertain about the timing here - but it is only a small risk size wise at this stage.
I don’t normally factor in the dollar in my trading S/W even though there is a negative correlation. I have looked at that some time back and decided it was too loose to have any relevance in the type of timeframe and TP/SL scenarios that I usually am looking at.
This is a daily chart of USOil and USDOLLAR index since start of 2018. If one looks at the price scales on the sides then the relationship is a very broad. I think supply/demand from economic performance as well as geopolitical incidents have a greater near term impact on oil prices.
The oil flow chart has so many stages and each stage can impact prices, although they are all in some way linked with USD S/W since most oil is still priced in USD:
Reserves/drilling/transport/storage/transport/refining/storage/transport/storage/transport/distribution to end-users
Suppose I should have qualified my statement by saying you’re a prophet of doom for those that may be long oil (which is something I’m about to be at the close of trading today i.e. start scaling in as instructed like a good boy).
Just thought I’d ask for the sake of interest really. I mean you seem to have a good grasp here so was just wondering.
Would I be correct in assuming that’s the Dollar Index on that chart??? That’s what I was monitoring anyway (Dollar Index) last year with Gold. Was using it in a crass attempt to dull the pain at the time. But it kept going up and Gold kept going down and that was that.
I enjoy your thread. So carry on as you are!!! LOL!!!
I just decided to scratch my first long with a few ticks + - only because I think there is a good chance to get it a bit cheaper tomorrow. Kind of an overnight trade in a way! I can do that, being a discretionary trader!
I’ll feel a bit silly, though if we are a lot higher in the morning! Oh well, it has been one of whose types of weeks so far so I won’t be surprised if it is!!!
Some way down the page you’ll come to a heading “Method 4 Percent Volatility”.
Using that formula what position size would YOU come up with for US Oil. Base it on capital of, let’s say, $25 000 USD???
See what you come up with. Good reason why I’m asking but let me leave you to do your own calc. and then I’ll throw you the curve ball that’s doing my head in.
Not sure how your account is set up. Assume a USD based account with Oil being quoted in USD. In other words no need to convert Oil in USD to a base currency of GBP or EUR type of thing.
So you are risking $500? and the 10-day ATR on my chart is currently showing at 1.478? SO the denominator is 4,434 giving 112,765 “shares to buy”?
But I don’t know how you translate “shares to buy” into USOil ? Is that meant to be 112,765/ current price/per “unit”? But what is the “unit” here? I understand the price per share but what unit of oil are we talking about here?
It’s quite late here and I have probably got this all wrong, so what am I missing!
Yeh. My point exactly. What’s not being factored into things in the article is the $ value per tick. On my platform: 1 CFD (Brent or WTI) has a tick size of 0.01 with a tick value of $1. That calculation is assuming a tick size of 0.01 with a tick value of $0.01. Unless I’m not getting it (which is the problem).
Let’s leave it for now. Late here too i.e. all alarms going off to tell me to check for signals. Then bed.
The above gets more complicated with me on the S&P. Will explain tomorrow.
P.S. it’s not so much the unit size. It’s the $ value per increment in the calculated ATR that causes the issue.
If the idea is that the risk capital is $500 and I assume the 3*ATR defines the stop level then can you not work out the dollars per pip so that the ATR range = 500? Then from the value per pip you can work out how many lots that is equivalent to?
You’re confusing me now!!! LOL!!! (Even more i should say!!! LOL!!!).
Nope. That’s for all of these RSI(2) based systems of Connors that don’t use stops. It’s a crass attempt to calculate a reasonable position size based on ATR is all.
Fortunately, I have never been too keen on the “catching a falling knife” type trades,or standing in front of express trains. 
I am not used to anyone taking any notice of what I write here - I will have to learn to be more careful!!!
I can do that, being a discretionary trader!