Monthly Archives: March 2012

210 Ticks in 5 Minutes: Could You Have Caught This Move?

A YTC reader Ryan asked if I could discuss a 210 tick move in Crude Oil that occurred at 11:25am ET on Thursday, March 15th 2012.

  • Would you mind detailing the entry opportunity on that 11:25am short provided there was an opportunity? Thanks!

This is the price move…

200 tick move in crude oil

(Note: the date/time difference is simply due to my charts being in local time; 11:25am ET on 3/15 is 01:25am on 3/16 here on the east coast of Australia)

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Impulse Against Your Trade: Should You Hold or Scratch?

Here’s some great Q&A with a YTC reader:

Question:

Hi Lance,

I wanted to ask what do you do in a situation where price retraces just enough to scare you. I mean let’s suppose we just trade with one contract to make things more interesting. We consider setups that offer a 2:1 as R:R. You enter your position (with one contract) and price goes in your direction but bang it reverses and goes so far as coming back to the level of your entry point. What tricks if any would you recommend to avoid scratching the trade? These situations offer quite a challenging dilemma to me.

Any advise is welcome. I have included a setup which occurred during the Globex session on the ES today March 14, 2012 (Eastern Time zone). I did not trade it but it illustrates quite well such a situation.

Best,

YC

Chart:

impulse against a trade

 

Response:

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How Quickly Can You Identify the Current Market Environment?

Here's a documentation & learning tip which can really add significant value to your trading knowledge, and in time to your level of skill and confidence.

Create and maintain a knowledge base documenting everything you know about every aspect of market environment:

  • How to recognise the environment / the features of the environment.
  • The nature of price movement within the environment.
  • How to identify a likely change of environment.
  • How to profit within the environment.

 

Classify environment type in any way you wish. As a starter you might want to go with just four environment types:

  • Trending, volatile
  • Trending, non-volatile
  • Ranging, volatile
  • Ranging, non-volatile

 

Within each environment type you should add subcategories. For example:

  • Features
  • Price Movement
  • Signs of Environment Change
  • Trading

 

Break each of these down to subcategories. I'll let you determine your own subcategories over time, as your document grows.

The following image gives the general idea, although the format could vary from notebook to loose-leaf folder to One Note document to spreadsheet or even a mindmap. Whatever works best for you is fine.

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