Tuesday, October 16, 2007

October 16th

Good morning all

Long AUD 0.8976


Forgot to check the AUD FX level, which happens to be 0.9002 at my entry. That level was rejected and I'm down on the trade for the moment. Still with Gold up again today, I expect the selloff seen in CAD and AUD yesterday to be a correction and not the reversal due.

Stopped on AUD +1. AUD did not break that 81 level and I did not like to stick around, as

  • AUD made a nice move already from 0.8936
  • AUD FX is at the 0.9000 level, which was support become resistance now


Short QM 86.650


It looks like we made a double top in Oil overnight and some retracement of that impressive run yesterday should be seen.

out QM +2, CL is bouncing from the 34ema, so I'm exiting this countertrend trade



FYI: I will post open and close of a trade following each other, even when I open another trade in between. EG. The QM trade above was opened after I did the AUD trade and closed before I closed the AUD trade. But I think it's easier to review the blog, if the Close of a trade directly follows the open chart.

Just noticed, that neither the Euro, nor the British Pound had that kind of selloff we saw in the commodity currencies (AUD and CAD)

Gold has another very impressive run up overnight


It's already on it's way to the second target. And about to break the 770 level.
Symetrical targets at 769.2 and 771.7, which I see as a intermediate top from a break of the 770 level


The ranges oil and gold show in a consolidation are too big for my account to trade the big contract. I gat at least something yesterday, when I scaled into the trade using QM. So I decided to scale into countertrend trades in Gold using YG, which trades at 1/3 of the ZG contract value, but still seems to have an acceptable spread. If I get it right I might even manage to learn the art of scaling into a profitable trade.

Starting a scale-in here: Short Gold 770.5


Short 2 at 771 average


Oil shows an intraday cup & handle formation. Nice one really


Opps...you might take a look at the USD/Yen daily chart, apply a standard Fib-tool and you will notice, that the daily stopped right below the 50% level. The days of the carry trade might be over if the Yen isn't able to trade above 118 soon


1 off at 768.7


Exit all 766.9, 41 was my target on the runner


We have an extreme move in favor of the USD in the currencies which I missed. At least I'm no longer long AUD. Nearly 200 ticks in 20minutes


Follow up on Gold


The range was a bit higher than I had my target set, but for the first time in a long time, I got about 80% of a swing.

Someone once said, if you feel uncomfortable in trading, then reduce size until you feel comfortable. Well maybe that's what I needed to do. Had  I traded 1 contract ZG I would have exited the trade at +21 if, and that's a big IF, I had not exited the trade at BE+1. Say my entry would have been the same as my initial YG trade. That would have taken the trade to -14 ticks at the high at 771.9. My ZG stop is between 20 and 30 ticks, so I would not have gotten stopped out. BUT if a trade is down 10 to 14 ticks for some time I tend to move the exit to BE+1 as you all know. And I might have taken that here as well, considering yesterdays performance.

Trading YG on the other hand allowed me to scale into the trade while Gold was still trading up, but already well at extreme levels for the whole move. There 10 ticks are worth 33.3$ and a full scale in with 3 contracts will cost me around 200$ on a 30 tick stop. But what's even better is, that Add-On's when in a profit should prove to work better as well. If the trade starts to work and I have an averaged entry, add-on's at lower levels won't affect the entry price as much as an add-on does, when I'm in just 1 contract initial. In the YG trade above, I did consider the add-on at 770 but thought leave it running for now, this level might prove to be support. Next time I might do it differently, will see.

Oil reaching the first target of that Cup & Handle formation I talked about


Short QM 87.150


60min QM overbought, add-on at 87.450, target 12 ticks or 86.850, which is above the highs of the last move. If the retracement doesn't start here, I will add at the second target of that C&H formation

Short add-on 87.500 (QM short 87.325 average)


Impressive run I have to admit. I had tried a short 87.900 but a button mixup ended in some additional commissions for IB, when I bought instead of sold a contract at 87.900 and instantly sold it again. So I stayed short 2 instead of adding a 3rd contract.

Oil is bouncing at the .30 level. I want the BE+1 exit and might pay for it, as I did not get it, full well knowing that oil often bounces at the .30 level. One off at 87.425, that gives me a bit room, if we bounce up again

I see this triangle on CL:


I cover this trade at -6 ticks. The planned 3rd add-on at 87.900 would have done the trick to bring the trade to profitability as the average would then have been 87.500, but to tell the truth after that mix-up, when the wrong order was executed and CL already started to fall, I did not chase it down, never knowing when CL would bounce up again for a 88.000 retest.

The trade was now covered as CL is about to break the bullish flag to the upside


Had to fix a bug in Futurestrader, missed that lower top in CL that way


I just came back and see that Oil has broken down again. In hindsight I sure should have kept these shorts


Long QM 86.775


Add at 86.500 (average 86.638)


Cover 86.800


That trade sure took it's time to start running. There was a lot of selling interest at 86.500. The exit was taken due to the tripple Top I see on the chart. Oil continues now towards 87, but I'm now up on the day on QM with the previous stop paid for by this trade. Maybe selling the runner would have kept me in better. Looking at the next bar...86.900 was available instead of .800, but 87.000 is resistance for now and that selling volume around the 50% level (86.46 on the chart) was for real.