lets have some fun with crude...!
- Thread starter linkon7
- Start date
That's why most people don't like to trade crude. Because of dynamic resistance and support. But as a day trader, we need scrips that move 4% in a single day consistently. Sometimes, a single swing on a 5 min chart can last for 2%. Thats awesome recovery factor.
Most people try to milk the bull and when scrip doesn't move, there is no recovery from bad trades. To make matters worse, people end up increasing the risk per trade and get hit badly in the process. Its very difficult to accept that any system, no matter how good it is, will not sync with the market on some days. Anything that can go wrong, will go wrong. Those days we need we just need to put a cut off limit to our losses and call it a day. I personally use 10K as my loss limit for the day.
We need a cooling off period for our charts to give us a range based on today's sentiments. The reason for giving the cooling off period is because we don't want to borrow data from day before. We want to deal with sentiments as of now.
A good amount of confusion is happening on how to deal with this opening range.
Do we trade the breakout of this range on either side or fade the extreme.
Now we need to co-relate this range with the structure of the market. If bulls are in charge, we will have a gap up and if they have conviction, then we will see them chasing price and take it higher. If we try to short the rally, then every stoploss we place will be taken out.
If the sentiments are balanced or there is some big data coming in the evening, then we will see a flat kind of start and every dip is bought and every rally is sold. If we try to trade breakout of range on such a day, then we take a stoploss hit again.
SO as a rule, we place our stoploss at the HIGH or LOW of the day + filter. Or we place it at the pivot that gave us our High or Low of the day. This stoploss can be a SAR depending on the structure of the chart. If we have a gap up and we assume sentiments are bullish. We place our stoploss at the Low of the day and its get taken out. We avoid going short as we can assume price is hunting for support. We can use an oscilator or ema xover or anything we like to fade this break down.
for target we are using narrowest range of the last 7 days.
Most people try to milk the bull and when scrip doesn't move, there is no recovery from bad trades. To make matters worse, people end up increasing the risk per trade and get hit badly in the process. Its very difficult to accept that any system, no matter how good it is, will not sync with the market on some days. Anything that can go wrong, will go wrong. Those days we need we just need to put a cut off limit to our losses and call it a day. I personally use 10K as my loss limit for the day.
We need a cooling off period for our charts to give us a range based on today's sentiments. The reason for giving the cooling off period is because we don't want to borrow data from day before. We want to deal with sentiments as of now.
A good amount of confusion is happening on how to deal with this opening range.
Do we trade the breakout of this range on either side or fade the extreme.
Now we need to co-relate this range with the structure of the market. If bulls are in charge, we will have a gap up and if they have conviction, then we will see them chasing price and take it higher. If we try to short the rally, then every stoploss we place will be taken out.
If the sentiments are balanced or there is some big data coming in the evening, then we will see a flat kind of start and every dip is bought and every rally is sold. If we try to trade breakout of range on such a day, then we take a stoploss hit again.
SO as a rule, we place our stoploss at the HIGH or LOW of the day + filter. Or we place it at the pivot that gave us our High or Low of the day. This stoploss can be a SAR depending on the structure of the chart. If we have a gap up and we assume sentiments are bullish. We place our stoploss at the Low of the day and its get taken out. We avoid going short as we can assume price is hunting for support. We can use an oscilator or ema xover or anything we like to fade this break down.
for target we are using narrowest range of the last 7 days.
Crude gives great profit and very soon erases all the profits gained. We have to find out when the erasing ends and erasing starts. As of Friday the opening was in upper channel of my range band. I entered long 3314. I could sense start of erase at 3365 but waited my chart to prove. I got short signal at 3358 and entered short. The price went below around 20 points from my entry. Suddenly there was an upsurge and price closed at 3345. Now I realised the mistake of short position, but then waiting for long signal from my system. I got the signal 3358. But my limit order was not executed and the price surged to 3375. I had to exit and enter with market order with loss of 20 points. From there was a nice move. Thanks to my range band. At 3422 again there was an attempt to erase profits. Very soon I extited and never gathered courage to short and closed my position. After that Crude went around 75 points down. That’s why I say Crude is good at giving profits and very good at erasing profits.
post: 1336055, member: 126459"]Linkon sir , How much capital you recommend for 1 lot crude oil , from conservative point of view.[/QUOTE]
Capital required per lot is purely depend on system that you are trading only..
If you have backtested report for the system you are trading then you can arrive capital required based on expected Max DD and recovery factor of the system...
As mentioned by doss, some systems may need only about 30k as max drawdown may not exceed 100 points...
Capital required per lot is purely depend on system that you are trading only..
If you have backtested report for the system you are trading then you can arrive capital required based on expected Max DD and recovery factor of the system...
As mentioned by doss, some systems may need only about 30k as max drawdown may not exceed 100 points...
The average trading range of crude is more than 100 points. Out of this 100 points .
Any good trading system should be able to catch 33% of average daily movement. So in this case 33% is around 3k as daily profit. In 10 sessions it becomes 30k. That’s my point if we start with 30k we end up with a profit of 30k in 10 sessions.
The only requirement is a trading system which can capture 33% of ADM.
Any good trading system should be able to catch 33% of average daily movement. So in this case 33% is around 3k as daily profit. In 10 sessions it becomes 30k. That’s my point if we start with 30k we end up with a profit of 30k in 10 sessions.
The only requirement is a trading system which can capture 33% of ADM.
Similar threads
-
-
Day trading live ill be posting my weekly pnl here lets see how it will be with some rules here-option buy
- Started by maheswara.rd
- Replies: 3
-
Any intraday option buyers?? Index option buyers esp from Finvasia lets connect guys???
- Started by maheswara.rd
- Replies: 13
-
-
