Update for the week of October 4th, 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 Oct. 4th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

Market Overview: Most of the major currency pairs spent the week extending previously established directions vs. the greenback as there were few new commodity trends established through the first week of Q4\'13. Since it is the new quarter, I for one shall be watching to see if that continues through the entire \'1st 2 weeks\' of the quarter (to get an idea of where fund managers are putting their money to work). Looking at the market from a broader perspective, stocks look very over extended while bonds have yet to really turn higher in earnest. October has historically seen some wild gyrations through its end, shall this go round be any different? That is too hard to tell at this point but I for one would not considering any purchases of significance until after it starts to snow and/or we hear some serious crying. 

Weekly highlight: This past week saw both the daily bear ab=cd target (102.08) and the daily 50% level (101.26) get hit. Indeed, shortly thereafter a substantial 2 hour double bottom was registered on the test of the 101.05 level. That price pattern seemed to confirm a bearish crab suggesting a point d. target of 105.28 going forward. Interestingly, I couldn't find too many bulls around through that bottoming process which suggests to me this market could move higher for a bit. However, a 'bearish crab' is a short harmonic pattern setup and any failure after the 105.28 level is hit should represent a significant selling window.

Personal journal:I am finding trading tough of late. The market is not trending so as a result, Brian the trend follower, just isn't doing much. I did not hit my personal goal this past week as I had a net losing balance. This is my only real goal for the coming week - to finish with a net positive balance on the week.

Trading Plan: While the market goes through this seasonally challenging time of year plus a US Federal Government shutdown, I can clearly see the fluidity of continuation patterns has been suspect. 'BoT' trading has been tough and I find through these 'non-trending' markets, the HVT setup seems to be the only one that keeps one out of trouble. I therefore am going to implement a hybrid of the OTE Short Sweet Spot / Momentum Divergence / HVT  setup for the next week. I shall only be taking these setups and my goal is to only take 3-5 trades through the coming week specifically off this setup.

 

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/

Screenshot of current '$30k' trading plan:

Update for the week of September 27th, 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 Sept. 27th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

Market Overview: In a stunning reversal, the US Dollar index has registered a violent bear ab=cd breakdown over the past two weeks. In recent comments, US Fed. officials have been far less hawkish on 'tapering' and as a result almost every world currency pair has benefited. Indeed, our two commodity proxies (the Cdn. and Aussie dollars) have shown particular strength suggesting international commodity demand is still quite robust. Additionally, European currencies look quite attractive after their long slide too. While many commodity sectors look a lot healthier, energy and grain prices continue to lag. In the former, Rbob continues to pressure that sector as we exit the summer driving season. In the later, historic US harvest numbers are understandably weighing on prices. Interestingly though, Cattle prices have hit their anticipated upside objectives and there are early signs of bottoming action in Wheat; both suggesting their respective sector trends may be soon drawing to an end.

Weekly highlight: With the market's focus back on the pending US debt ceiling vote, prices quickly retreated from their exaggerated levels coming out of the summer and through what I consider to be a complete distraction - Syria. Indeed, we now have a confirmed double top working on the daily charts (with the move through the significant lows of 103.74) and the breakdown also tripped up the weekly stop level (102.22). If not overtly bearish, recent weakness does suggesting internal weakness to the up trend. Considering the 2hr double bottom at the 102.20 level, my expectations are for a little bit of 'cleaning up' over the coming sessions. While I could see a further short term push down to test those lows, current resistance appears to be in and around the 105 to 106 level and I for one shall be watching the market's reaction once we reach that level for shorting ideas.

Personal journal: I have been trading my live/practice account like it is 'real' money for the past month and a half as I make my way through the transition from Combine trading to actually trading other peoples money in earnest. I wanted to get back into a 'groove' and over the past couple of weeks I have had steadily worked towards putting together weekly net gains. I am only now starting to feel comfortable considering trades on a real basis. As long as I keep to my rigid model/trading plan setups, I have relatively low anxiety and am comfortable living with the results. I am especially pleased at the addition of 'HVT setups' to my daily trading plan. These enable me to participate in 'range' days and seem to have a very high probability of success.

Trading Plan: For the week, my plan is to follow my daily trading plan and only take legitimate setups. Since my account is so small, I can only realistically risk 7.5 ticks on any one trade. So I must from now on, identify the setups (and their appropriate stop levels) and only put the trade on where I can risk 7 ticks (plus a half tick for commissions). This will greatly reduce my trading but because I have a maximum risk of $1500 and Rule #2 of investing says never risk more than 5% of your trading stake on any one single idea, $75 is the number I have to work with. I can be wrong 2 times in a row in any one given day and must shut down if I exceed $150 in losses.

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/

Screenshot of current '$30k' trading plan:

Update for the week of September 13th, 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 Sept. 13th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

 

Market Overview: In a potentially bullish turn for commodity prices in general, both the Cdn. $ and the Aussie $ staged nice rallies through the past week. At the same time many stock indices pressed higher too. Indeed, some have \'blow-off-top\' written all over them. While longer dated maturities have yet to turn, short term paper strength (falling yields) suggest a soft landing through this Fed. hawkish cycle. Market corrections feel like buying opportunities and considering the seasonal window we are in, we may get a juicy one over the coming weeks.

Weekly highlight: As talk quickly turned to plans for a 'disarmament' of Syrian chemical weapons, prices retreated from the lofty levels seen late last week, Indeed, it would seem the war premium has been taken out of Crude as they brought her back down to within a whisker of the OTE long sweet spot. After some rather dramatic tails on the 2hr chart price stabilized with the 50% level turning into an interesting pivot. We finished the week sideways and rather well contained within a price channel.

Personal journal: I have been trying to 'get back in the grove' for the past 5 weeks and have not been able to. I am getting concerned but will patiently wait for a positive feeling to come back to my trading before I start placing any 'real' trades.

Trading Plan: I must be a bit more selective in my trade decisions. With this in mind, I must have a working 'BoT' trade on both the 2hr and the 15m charts before I can consider even looking for 3minute setups. This will mean I man not trade that much over the coming week but will fill the time practicing Hoag's value trade idea/model.

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:

Update for the week of August 30th, 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 30th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

 

Market Overview: Labour Day weekend 2013 is finally here and with it comes a nice break and hopefully a resumption of relatively \'normal\' trading environments once on the other side. The summer session itself was rather lack-luster and produced few new trends in what felt like a counter trend trade environment. Should the pre-May prevailing trends resume, September and October may be tough months for commodity bulls. Once on the other side of the pending seasonally weak period, prices may look attractive heading into 2014. That is a long way away from now and my number one short term goal will be to have conservative expectations until we are well into November.

Weekly highlight: The last week of August, 2013 was witness to an almost parabolic move higher to begin with and then just as violent of a move back down to end. Political rhetoric put in a short term bottom through Friday's session but unless there is some serious military action, prices may continue to give back ground as we finished the week still above the 2 hour OTE long sweet spot. Once into that zone, I for one shall be looking for some sort of counter trend (dead-cat-bounce) rally.

Personal journal: I have spent the past year and a half interviewing for this position. I have now been hired - I just have to go out and do what I am good at and enjoy the experience.

Trading Plan: Since I am now 'live', trader discipline has been slowly coming back. I have a reliable model to work with and am comfortable hunting those setups. Since there are no longer any combine objectives to cloud my investment decisions, my only goal is to slowly build both my capital base and mental capital through September by taking valid trade setups and following my model's strict trade management rules. Max risk on any given day is $300 and my goal is to take 3 to 4 valid trade setups through any given day. My weekly goal is to take 50 ticks in net profit.

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:

Update for the week of August 23rd, 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 16th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

 

Market Overview: Late summer, 2013 is passing with little fan-fare. Stocks have cooled, bonds too, while the currency markets are relatively stable at the moment. Interestingly, over the course of the summer, only the Euro has established a floor to work with vs. the greenback, and that floor is tenuous at best. Considering the significant US political 'showdown dejour' coming in mid September, growth may come into question and a resumption of the 'fear' trade may not be off the table as of yet. Many assets are now no longer 'oversold' and one can really feel the low volatility summer atmosphere. Consider too September's historically poor performance and one has to give some serious thought to either hedging or even getting short.
 
Weekly highlight: As had been anticipated, prices bounced nicely off the 2 hour OTE long Sweet Spot (103.65) and rallied nicely for the remainder of the week. Indeed, we finished so strong one has to wonder if Crude prices are not finished moving higher just yet. In my daily 15m USO commentary I suggested upside targets off the bottoming action had been hit and even exceeded. Additionally, short term momentum studies looked a little suspect heading into the weekend. So my expectations is that we will need a bit of trading to clean up the momentum indicators and only after a day or two of consolidation should we get an idea of weather or not we move higher yet. Because of the significant holiday coming, my hunch is we drift up into resistance (and maybe even hit some of the projected upside targets previously posted) into the September 12th pivot and then being our seasonal correction in earnest.

Personal journal: This past week I was able to reign myself in and get back on track. Because of the size of my account, risk must be less than 14 ticks per trade. And because of the specific setup I trade with TsT, initial rally/selloff moves (that being the point A to point B of the ab=cd price pattern) can not be more than 50 ticks. If that move is greater than 50 ticks then I must simply watch the whole pattern go by. Because of this realization, I found I was far less eager to take positions and was able to manage myself and my actions more appropriately over the course of the week. Irrespective of these limitations, the market did afford opportunities. Monday and Tuesday were tough as personal loss levels were hit (-25 ticks per day). Conversely, on Thursday I was able to book several winning trades and finish with a +90 tick day. The net balance was a marginally profitable week (roughly +30 ticks) and a renued confidence in both myself and the model - if followed appropriately. Indeed, the model does work, it's just a question of personal patients in letting me let the market tell me when to participate. Another week of paper trading like this and I feel I will be ready to switch back to 'real' trading.

Trading Plan: Continue to trade in the live/prac account as if it were real money. Do not even attempt a 'real' trade until at least three days of consistently taking 'valid' setups is established. I know for sure this entire week shall be 'practice' trading, the question for me right now is, can I get my discipline back for the post Labour Day market.

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:

Update for the week of August 16th, 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 16th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

Role period: Moved to October Crude Oil: CLV3
 

Market Overview: The currencies saw little volatility over the past week as the summer draws on. Interestingly, the metals seem to be taking this opportunity to 'correct' the massive sell-off through the spring. The 'ABG' trade that dominated for so long might be trying to re-establishing itself as all three components have gone through what I would consider rather healthy corrections. I for one shall be watching to see if they take over again. No real conclusions ought to be drawn through this seasonally suspect time of year so enjoy the short term price movements if you can and lets get ready for the fall.

Weekly highlight: Prices continued to steadily move higher over the course of the past week and even pushed briefly to new relative highs. Because of this, daily and weekly charts now have the old peak (109.32) within reach. Considering the significant instability within Eygpt and the volume late summer market, any rumor or serious story may send prices moving violently in either direction. The 2 hour OTE long sweet spot currently sits near 103 to 104 and would be a logical place to hunt for potential long setups through the coming sessions.

Personal journal: This past week I continued to take too many questionable trades. Until I can get my risk threshold/per trade constantly below 15 ticks I shall continue to paper trade. I lost money (prac/live) account this past week so obviously my 40 to 50 tick goal was not met. I shall continue to have that goal and try once again to get my discipline back. I have posted a few USO analysis charts and feel comfortable with those 15m long setups. I shall this week try to concentrate on only commenting on the market IF I see one of those setups come in, otherwise - do not even paper trade...

Trading Plan: Continue to trade in the live/prac account as if it were real money. Do not even attempt a 'real' trade until at least three days of consistently taking 'valid' setups is established. I know for sure this entire week shall be 'practice' trading, the question for me right now is, can I get my discipline back for the post Labour Day market.

Excellent example of the only trade setup I should be considering with the TsT account:

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:

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: