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A thread for light crude oil charts and related instruments.
Summary
Started to test swing trading and building a short pyramid.
Paper trade $20,000 initial capital.
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Learning lesson -31 Aug 2011: Trust your numbers. Don't use 15 min CCI for topping in CL stay with the 5 min. Once in a trade go for at least 63 cents unless you are sure you are wrong.
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peace, love and joy to you
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Can you help answer these questions from other members on NexusFi?
It looks as if the crude light chart is setting up for a possible break of the up trend.
If it starts a downward move this could be the opportunity for a down pyramid for swing positions.
Crude has big swings so getting on board (and not getting stopped out) may be difficult and so a multiday position is better suited to accounts with enough cash to post a big wide stop.
At the beginning of a new move (if it does happen) expect sharp counter attacks until the move has been underway for a few weeks or about 1/3 retracement of the upleg leading into the peak.
Looking more closely at the data the high on which the 109 resistance was based was 108.80. The close today 108.94 or 0.14 above that.
Looking at an IB chart (see below) 107.96.
So a more cautious approach is to wait for a close below 107.50.
I am going to stay with the more aggressive short and go short tomorrow based on short term indicators (and intraday topping action against resistance), if that happens. Then if it closes towards the low, e.g. at less than 25% of the days range, then I will hold the short.
My real dollars account is very small so I can't realistic trade crude in it. (I might trade the HOD etf though).
However, for the pyramid exercise I am starting with $20,000. The idea is not to intraday trade the entire position, though at the beginning I may do that until- and IF - price close below the 107.96 by a margin, so say below 107.50.
(Nothing I post is a trade recommendation -this is a charting exercise.)
I'll need to review the graph to see what's next but too tired right now.
Learning lesson from today was set the intraday but right away after the closing out of one of the 2 shorts.
It turned out there was a 50% retrace of the fall from 9:15am to the low where I took profits on one, however that was only 20minutes later.
So rapidfall - snapback retrace and fall again.
This has the hallmarks of a big downleg. If this turns out to be the case, then there may be important messages about longer term eco health.
For the initial position for this exercise - multiday swing and building a pyramid - I used the daily chart.
For the intraday ideas above, no I use a 5min chart and a 1 minute chart.
Because the drop was so surprisely fast I used a 60 min chart to get a scope of the move and try to find intraday points to sell against.
Over the next few days we might see 104.73 =50% retracement, but that is only in the back of my mind and I would fresh at each new days chart for a place to sell against.