Update for the week of August 9th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is the daily, weekly and 120 minute charts with Crude Oil's term structure and CoT summary for the week of August 9th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

Market Overview: While the US Dollar continues its recent consolidation, most of its major trading pairs moved basically sideways against the greenback over the past week. Within the commodity space, threats of a bumper 2013 US grain crop continue to weigh on that sector in particular and seeming to confirm this notion, meat prices have firmed considerably and are now starting to point higher in earnest. Elsewhere, metal markets appear to be firming as we move into a more bullish seasonal period for them. Specifically, our professor of economics, HG Copper, has a nice bottom working and suggests the world economy is on the mend.

Weekly highlight: As anticipated, prices slowly worked their way back down into support through the beginning of the week as benign terrorist threats and relatively little significant economic news kept people on the sidelines. A new threat to a European landmark (news link) and better Chinese economic data brought bidders back in (or at least covered their short positions) heading into the weekend. The significant low of 102.67 was tested and broken on the ultimate climax of the pullback. Failure for price to hold this low (and then its quick subsequent bullish reversal) has got the market's attention as both short term long setups and longer term short setups emerged off that action.
 
Personal journal: The past week was an absolute roller coaster for me emotionally even though I didn't actually do any 'accountable' trades.
The good news: I did indeed receive news that I passed TopStepTrader's $30,000 combine and that they had enough confidence in me to go ahead and fund me as one of their junior live professional futures traders. I got to talk to (what I would consider a mentor) Senior TsT Scout John Hoagland for the first time in more than a year and the call itself actually represented a personal goal I wanted/needed to achieve. After the call, I had a good cry - I knew I could do, I just had to do it!
The bad news: When one reaches a significant milestone in life there is always the potential for 'slippage'. Like a correction against a trend in the market, one is foolish to expect anything to go in a straight line forever. And while there was no material damage done, I found the first three trades I took following my statues change with TsT (all in their Live/practive account) to be questionable at best, and down right foolish at worst. While they all had portions of 'correctness' within each of them, there wasn't overwhelming confluence and I myself was far too willing to take 'maybe' trades with far too much risk. The end result was a net loss of 27.5 ticks ($275) in one day's trading (Thursday). I was rather upset at myself through the rest of that day and gave the entire process some serious thought. Three conclusions jumped out at me and I have now added them to my trading plan. 
1. After any period away from the market (not on T4 and trading 'up-to-speed') I must take a similar period getting back 'up-to-speed'. Trade the same but only do it in practice account until you have put 2-3 days of exact model/plan following into practice (after reviewing with other traders, I found my 3 trades taken were not well timed - even slow). I now see that there is a 'speed' at which one must operate at to be effective. Taking the break (as outlined in last week's blog post) after finishing my last combine needs to be recognized and I need to understand that one can't just walk back on the field and expect to be running at optimal performance levels.
2. The model works - but only if I follow it to the letter. I must appreciate that because of the smaller account, there may be days where I simply don't take a trade. Others may be zipping in and out of the market (trading larger accounts and being able to take larger risks) but I must have the discipline not to trade.
3. Just because I am now a 'Live' funded trader doesn't mean any of this gets any easier. Indeed, I know what speed I need to operate at and the required degree of patients, vigilance and discipline needed. I have to bring all of that to the table every trading day.

Trading Plan: While TsT management puts together the funded account details, they have asked me to trade the 'live' practice account to the same level as I would trade a 'live' cash account. To that end, I will take the coming week and do exactly that. My goal should basically be the same as the combine and I have a weekly goal of taking 30 to 40 ticks from the market. My goal is to take 4 solid setups (30 to 40 ticks potential return with 10 to 15 ticks of risk) through this coming week. I will expect to have 2 trades work, 1 trade break even and 1 fail. This should result in a net profit of about 40 ticks.

That's all for this post, 
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/

August, 2013 $30k 'live' trading plan: