Day 7 Live Funded Trader at TopStepTrader

Thursday: January 28th, 2016

Crude Oil Futures Day Trading

Right now we are seeing a big opening range opening this morning with a lot of volume being associated with the movement. At 8:10AM CST, I attempted my first trade entry from the Open Range Trade. It was a 13 tick loss on the first trade this morning. We are moving higher and faster … but for how much longer?

This is one of those trading days where you have to be very careful on a reversal signal. After taking a very quick trading loss, I am of the opinion we will need a higher volume than the highest volume bar to slow down the advance at this point in time.

The highest volume bar is 2216 at 7:56AM CST. In other words, we will have to see capitulation before we attempt any short entry into the market now. The overwhelming evidence has been a long from the open right now.

We are very quickly approaching the 2R area at 8:20AM CST.

Today’s trading was a day that I just have to say was not for me … it was way to volatile to effectively be able to get positioned properly. I have decided to live to fight (trade) another day.

Why did I not see the short entry of 3469 at 8:23AM CST this morning? How many TICKS should I be willing to RISK against the entry point in an Extreme Volatility Environment?

If I would have went with 2/3R today this would have me at my maximum stop loss per trade of 20 ticks per entry; whereas, one of my minimums is 10 ticks.

It looks like I would have had 2 short entries … but one of the things in the back of my mind is not to get grinded out of the market. I took on 5 trades today, but I was unable to successfully get positioned and stay in the trade. It is a day where I had a plan of attack against what I believed for a false up move to get short … but I ran out of bullets before I reached my 40 tick stop loss area that stops my trading day.

Now as I am typing this out we are trading at 3325 from the high seen around 8:23AM CST of 3482.

Where did I go wrong on my trading today? I knew it would be an issue against the stop loss … I was not comfortable trading a 20 tick stop loss at the 2/3R today … and the 1/2R had it at 15 ticks … this still had me thinking this is too high against being wrong on a trade.

I went with a 12-13 tick stop loss or right in between 1/3R and 1/2R (10+15)/2 today equals 12.5 ticks rounds up to 13 ticks.

This was obviously not the answer in this trading environment today of extreme market movement … but I also thought 10 ticks was too small … so I compromised at 13 ticks against 15 ticks … when the volume should have had me at 20 ticks today.

Two losses at 20 ticks would have had me out of the trading day on only 2 trades and I know a lot of times it takes at least 3 trades to get positioned when I am wrong on trade direction and time … see Tuesday’s trading.

So I sit with an imaginary win of $500 that didn’t count due to FOMC not being able to trade at that point in time even though the information was out and a solid entry point according to my trading rules materialized.

Did this effectively ambush my trading today? I tried my best to forget the opportuntiy loss of yesterday … but perhaps … the back of my mind Unconsciously it was there against my thinking going into the trading day.

I really felt I would have my breakout trading day today coming into the trading day. It was not to be … which is a iittle disappointing and has me with 3 trading days to get above zero … but I don’t want to be just above zero … I want to be at least above 1K in my trading account over the next 3 trading days I trade.

I will not trade Friday month end. I will look at Monday to trade … but most likely trade on Tuesday of next week … so the yo-yo continues around the zero line in my trading account.

My rant may continue a little later today …

Crude Oil Futures Day Trading Charts I Collected Today:

My Short Entry of 3419 … this was my best trade of the day … if I would have kept a 15 tick stop loss adjusted to break entry point of 3421 I would have remained in the trade and at least would have broke even on the trading day.

This was my second trading opportunity. Short 3419 at 8:26AM CST. I was filled on the stop loss at 3431; whereas the swing high was 3434 before going back down. Before that the swing high was at the R2 point located at 3441 on the trading day.

Here is the question I wrote in my “black book” my trading journal today: Why did I not see 3469 as an entry point today? Should I have kept a very close 10 tick stop loss — I would have been down perhaps 20 ticks when I would have been able to catch this short reversal trade I was expecting to see.

My Equity Curve at the end of January 2016. I traded 7 days in the month of January and was unable to break out successfully from the zero line. I will have to wait until February for my break out now on the equity curve.

My overall goal remains the same. I will build my trading account up to $2,000 in net equity and then withdraw $500 according to my trading plan. I have 3 more trading days left to get qualified. Everything considered today, I am right on target. I am treading water and have been unable to get a couple trading days together to drive the trading account above my initial profit target of $1,000 on the equity curve.

So here is the bottom line … I am treading water successfully waiting for an equity breakout. What I need is to get 2 to 3 trading days (wins) in a row this will effectively move me off the zero line. Hopefully, next week on trading days 8 through 10 I will do exactly this in my Crude Oil Futures Day Trading.


Good Trading,

David M. Knight

About The Author

David M. Knight

I am a 30 Year Futures and Commodities Trading Veteran. In addition, I enjoy games of skill and chance like: poker, craps, blackjack and roulette. During my professional career, I have developed and implemented successful trading strategies and methods; along with winning systems in games of skill and chance. Join with me on our mutual journey together.