First, for those following me for the last year or more, you know I've changed my style a few times. At first I felt bad about this, I felt perhaps I was doing something wrong before and that anyone that followed me was possibly now doing something wrong, too.
But with time, I realized that just isn't how it works. There is no right or wrong. There is only the now. (Hi George!)
The details below are just to satisfy your inner-self :) In truth, they are to keep your interest in this thread so you will keep reading and hopefully discover something much more important. These chart details (time frames, indicators) are not important or relevant to this thread.
So, let me start by saying that I primarily trade CL (crude oil futures), and that I exclusively trade a 5 minute chart. I do not look at tick, volume or range charts, and I do not look at any minute chart smaller than a 5 minute. I do have a 60m chart up, and occasionally also look to a daily chart.
On my chart I have the following indicators:
- futures.io (formerly BMT) Envelope Fib Bands
- Prior Day High, Low
- Current Week High, Low, and R1/S1/PP pivots [CMI Pivots Indicator]
- Prior Week High, Low, and R1/S1/PP pivots [CMI Pivots Indicator]
The futures.io (formerly BMT) Envelope is set to use my futures.io (formerly BMT) CollectiveMA as the midline, which is merely a combination of a SMA 9, SMA 34, SMA 100, EMA 20, EMA 34 and EMA 100. Why these six moving averages combined as one? Because it is my belief these six moving averages represent the vast majority of all moving averages used today by big traders, and by combining them all into one, I've made my own unique S/R trend-following indicator. The bands then calculate Fibonacci levels away from the midline.
You can find futures.io (formerly BMT) Envelope Fib Bands and futures.io (formerly BMT) CollectiveMA in the VIP section.
The remaining three bullets are there because I've learned that price interacts with these areas in a remarkable fashion and that you absolutely must have them on your chart, and you must be aware of them at all times.
I trade only with-trend. I do not short when price is above the midline, and I do not long when price is below it.
I trade 2 to 3 targets, with each target having 1 or more contracts. The first target is usually quick, 8-10 tick profit. The second target is set in accordance to price action (recent lows, swing levels, s/r levels, fib band, etc). The third target is a runner that usually goes for 50-75 ticks, or more.
My stop is usually about 16 to 24 ticks. Some may cringe at that. I set my stop in accordance with price action, but I also set it wide enough to avoid stop hunting. My goal is to only get stopped out when I've made a bad trade. I do not get stopped out when I picked the trend correctly but just missed the perfect entry by a few ticks.
On CL, 1 tick is $10.00 USD. CL is trading at about $75 as we speak, so a 24 tick stop (0.24) is roughly equal to 0.3% of the trading price. CL almost always moves 100 ticks before lunch and another 100 ticks after.
CL is a very volatile instrument. It is not for beginners. It makes ES seem like watching paint dry. More on why this type of trading better suits my personality later.