A view on commodities
- Thread starter DSM
- Start date
Hi Ankur,
General trading strategy :
* I only use 20EMA on 5M chart.
* Follow Price Action
* Look at intraday Candlestick patterns
* HTF (Daily Charts with 20EMA) are guide for direction to trade in.
* For intraday trades : MA Slope + Swing Points + High and Low of Day + Strength / Weakness, Break from congestion points etc. are factors that I keep in mind.
* Trade only after formation of range : Around Noon 12-12.30+ (After LME open) Around 5.30 (US Open) and late night trades 8.30+ for reversals.
* Look to scalp a few K's (Small targets)
* Go for high probability trades with small risk.
All these are subjective - and yet to have a written hard core strategy (that can be converted into an AFL) though have tried at times - but it is still a work in progress.
General trading strategy :
* I only use 20EMA on 5M chart.
* Follow Price Action
* Look at intraday Candlestick patterns
* HTF (Daily Charts with 20EMA) are guide for direction to trade in.
* For intraday trades : MA Slope + Swing Points + High and Low of Day + Strength / Weakness, Break from congestion points etc. are factors that I keep in mind.
* Trade only after formation of range : Around Noon 12-12.30+ (After LME open) Around 5.30 (US Open) and late night trades 8.30+ for reversals.
* Look to scalp a few K's (Small targets)
* Go for high probability trades with small risk.
All these are subjective - and yet to have a written hard core strategy (that can be converted into an AFL) though have tried at times - but it is still a work in progress.
Hi DSM,
Can you please explain how you trade. I mean can you please explain some strategy about crude.
thanks
Can you please explain how you trade. I mean can you please explain some strategy about crude.
thanks
The words the thoughts create, we ought to be careful of ,, which are the road blocks for successful trades.
Should- Phrases include: “The market should have” and “I should have”. Those phrases are often used to socialize losses. They are a strong signal something is off. They should be used to aid one in correcting his/her vision , not to make one feel better.
Must- Phrases include: “The market must…”, “I must make money”, or “I must trade”. The market does not have to do anything and either do you,or me . When we use the word “must” it is hardly ever from a position of strength. The market knows when we are desperate and will take full advantage of you and me . Keeping our expenses as low as possible will make it easier to not make those statements.
Will- Phrases include: “The market will..” and “I will make money”. Once again the market does not like to be told what to do. It is the bratty human screaming at the tops of her /his lungs. The word “will” relaxes your mind, similar to “should”, people use it to be lazy instead of a dark background in an otherwise light picture. We can do everything right and still lose money. The very reason why trading is so effective at diminishing confidence.
Won’t- Phrases include: “The market won’t…” or “I won’t make money”. Notice a theme here? We are part of the market, we are not the market. The market is a one way walkie talkie, you listen, it talks.
Can’t- Phrases include: “The market can’t..” or “I can’t…” or “I can’t lose anymore”. Yes the market can, go look at a chart. Go look at a Fed day or about any chart from 2008. Not only can it happen, it does happen. There are no more once in a lifetime moves in the market. There are and always have been life changing moves. No one ever said trading was easy but at least in the case of futures someone is taking your money. If you think you can’t, you probably wont. The market will take every penny you have. If can take every penny you put at risk. Fix the problem, before you run out of money and then it is too late.
Impossible- Phrase includes: “It is impossible to make money”. Once again someone, somewhere is making money. It may not end up being an efficient use of my time or capital but it is possible. I am substituting an excuse for execution.
Sense- Phrase includes: “The market does not make sense”. Many fortunes are made in an illogical market. Logic is a bigger driver than risk controls for most people. It is easier to ignore our P/L when we can see or touch the catalysis. For example, it is cold buy natural gas. By the time you change your view or are forced to change, the market flips. Logic will eventually prevail, with or without you.
Should- Phrases include: “The market should have” and “I should have”. Those phrases are often used to socialize losses. They are a strong signal something is off. They should be used to aid one in correcting his/her vision , not to make one feel better.
Must- Phrases include: “The market must…”, “I must make money”, or “I must trade”. The market does not have to do anything and either do you,or me . When we use the word “must” it is hardly ever from a position of strength. The market knows when we are desperate and will take full advantage of you and me . Keeping our expenses as low as possible will make it easier to not make those statements.
Will- Phrases include: “The market will..” and “I will make money”. Once again the market does not like to be told what to do. It is the bratty human screaming at the tops of her /his lungs. The word “will” relaxes your mind, similar to “should”, people use it to be lazy instead of a dark background in an otherwise light picture. We can do everything right and still lose money. The very reason why trading is so effective at diminishing confidence.
Won’t- Phrases include: “The market won’t…” or “I won’t make money”. Notice a theme here? We are part of the market, we are not the market. The market is a one way walkie talkie, you listen, it talks.
Can’t- Phrases include: “The market can’t..” or “I can’t…” or “I can’t lose anymore”. Yes the market can, go look at a chart. Go look at a Fed day or about any chart from 2008. Not only can it happen, it does happen. There are no more once in a lifetime moves in the market. There are and always have been life changing moves. No one ever said trading was easy but at least in the case of futures someone is taking your money. If you think you can’t, you probably wont. The market will take every penny you have. If can take every penny you put at risk. Fix the problem, before you run out of money and then it is too late.
Impossible- Phrase includes: “It is impossible to make money”. Once again someone, somewhere is making money. It may not end up being an efficient use of my time or capital but it is possible. I am substituting an excuse for execution.
Sense- Phrase includes: “The market does not make sense”. Many fortunes are made in an illogical market. Logic is a bigger driver than risk controls for most people. It is easier to ignore our P/L when we can see or touch the catalysis. For example, it is cold buy natural gas. By the time you change your view or are forced to change, the market flips. Logic will eventually prevail, with or without you.
Hi DD,
Thanks for the suggestion. Usually I trade half day on Fri. and so was out. Just saw your message. I had looked at crude charts in the morning and was short crude as it was weak. Closed with a profit.... though had a mind to keep the position open with a higher SL. You are right. Crude is at a critical level. Attempts to move higher have been sold off. So it is sell on any sign of weakness after a rise.
Re. Nifty : Guess it is the Greek fear. Greece has to make payment of 6 Bil. Euros this month - which seems it will not be able to make, unless the socialist govt. make hard choices, which really is a hard choice for the Govt. which it got voted into power on populist and macho talk of taking on EU. No easy choices here.... And all eyes are on Greece. Greek default on its obligations can spread contagion especially in the EU and spread quick across the globe. Japan is fragile, inspite of financial engineering thru Abenomics. China is slowing down, inspite of which its stock market has made some acrobatic moves. Russia is in trouble due to oil issues, Brazil is mired in scandals and looks like issues there will get worse. Which leaves US - which has managed to create exotic sausages to sell to global institutions (The same old story of old wine in new bottles - in this case toxic and doubtful debt being packaged and sold with in new shiny labels) India is a different story, though we have issues with inflation, govt. policies (slow and muddled in bureacracy) Delayed monsoon due to El Nino effect which can turnout to be a drought as well. All the above negatives are factored in, and the big issue of Fed. rate increase may well as likely be postponed according to some market watchers (inspite of today's positive NFP data)
All the above are ifs and buts. And as traders we will always look for confirmation in the charts..... I think that the global engine will chug along the same track, and the dips will be considered an opportunity to have gone long. In my view Nifty is bottoming or will bottom out...... Interesting times ahead.... Let's see what happens.....
Thanks for the suggestion. Usually I trade half day on Fri. and so was out. Just saw your message. I had looked at crude charts in the morning and was short crude as it was weak. Closed with a profit.... though had a mind to keep the position open with a higher SL. You are right. Crude is at a critical level. Attempts to move higher have been sold off. So it is sell on any sign of weakness after a rise.
Re. Nifty : Guess it is the Greek fear. Greece has to make payment of 6 Bil. Euros this month - which seems it will not be able to make, unless the socialist govt. make hard choices, which really is a hard choice for the Govt. which it got voted into power on populist and macho talk of taking on EU. No easy choices here.... And all eyes are on Greece. Greek default on its obligations can spread contagion especially in the EU and spread quick across the globe. Japan is fragile, inspite of financial engineering thru Abenomics. China is slowing down, inspite of which its stock market has made some acrobatic moves. Russia is in trouble due to oil issues, Brazil is mired in scandals and looks like issues there will get worse. Which leaves US - which has managed to create exotic sausages to sell to global institutions (The same old story of old wine in new bottles - in this case toxic and doubtful debt being packaged and sold with in new shiny labels) India is a different story, though we have issues with inflation, govt. policies (slow and muddled in bureacracy) Delayed monsoon due to El Nino effect which can turnout to be a drought as well. All the above negatives are factored in, and the big issue of Fed. rate increase may well as likely be postponed according to some market watchers (inspite of today's positive NFP data)
All the above are ifs and buts. And as traders we will always look for confirmation in the charts..... I think that the global engine will chug along the same track, and the dips will be considered an opportunity to have gone long. In my view Nifty is bottoming or will bottom out...... Interesting times ahead.... Let's see what happens.....
DSM, check it out. Situation of nifty and crude at this moment is same. no difference. Last supports. Just a tipping point and then either blue sky or brown earth.
Hi Aman,
Guess this is a short term view? Crude tends to move at times with volatility in the contra direction in the short term to take off directional stops before it moves in the direction of the higher TF. As I see it, Crude has traded below the 20 EMA twice on the daily charts, which is the higher TF I look at. So in my view, on the larger TF, Crude looks weak. And hence I said, in my previous post, any sign of weakness after an upmove would be a good level to short.
The current spike seems to be due to the positive NFP data which is also positive for commodities and negative for precious metals. Will it hold? Look for Dollar index - As per my reckoning on the charts, Crude wold be a sell on rise....
The beauty of Trade Tiger is that I can view 4 charts on different TF on one screen - with multiple indicators though I use 20EMA usually and 5 EMA on 240 M charts. Attached snapshot below.
Guess this is a short term view? Crude tends to move at times with volatility in the contra direction in the short term to take off directional stops before it moves in the direction of the higher TF. As I see it, Crude has traded below the 20 EMA twice on the daily charts, which is the higher TF I look at. So in my view, on the larger TF, Crude looks weak. And hence I said, in my previous post, any sign of weakness after an upmove would be a good level to short.
The current spike seems to be due to the positive NFP data which is also positive for commodities and negative for precious metals. Will it hold? Look for Dollar index - As per my reckoning on the charts, Crude wold be a sell on rise....
The beauty of Trade Tiger is that I can view 4 charts on different TF on one screen - with multiple indicators though I use 20EMA usually and 5 EMA on 240 M charts. Attached snapshot below.
I was referring to similarity in their charts but still I hear what you are saying. However, I still believe nifty has more chances to have 2008 deja vu D) than crude or any other commodity. Coz, IMO, I have seen that commodities no matter how volatile their price is, have this inbuilt trait what is known as 'secular bullish'. Something stocks would never have, be it microsoft or apple. As I said in one of my earliest posts here that commodities have a definite intrinsic value no matter what market price is, while stocks have none no matter what their market price is. Take for example, if I have 100g gold biscuit in my pocket, anyone anywhere, even in the non-urbane corners of the world, would recoganize its value and it may be exchanged for a fair local price/services if need arises. Now if instead of gold biscuit I have 1000 US T-bonds or Apple shares on me, I would be having great deal of difficulty convincing a tribal Yemani or Mongolian or eskimo that these colorful printed papers are worth more than the yellow metal. What more, even if I were to get transported back in Roman times or even before, 100g goldy would help me survive.
Anyway have a nice weekend, friend. It is always a pleasure interecting with you. Take care.
D) than crude or any other commodity. Coz, IMO, I have seen that commodities no matter how volatile their price is, have this inbuilt trait what is known as 'secular bullish'. Something stocks would never have, be it microsoft or apple. As I said in one of my earliest posts here that commodities have a definite intrinsic value no matter what market price is, while stocks have none no matter what their market price is. Take for example, if I have 100g gold biscuit in my pocket, anyone anywhere, even in the non-urbane corners of the world, would recoganize its value and it may be exchanged for a fair local price/services if need arises. Now if instead of gold biscuit I have 1000 US T-bonds or Apple shares on me, I would be having great deal of difficulty convincing a tribal Yemani or Mongolian or eskimo that these colorful printed papers are worth more than the yellow metal. What more, even if I were to get transported back in Roman times or even before, 100g goldy would help me survive.Anyway have a nice weekend, friend. It is always a pleasure interecting with you. Take care.
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