Oh_If_Only
Long

Recoil Incomplete Retracement Short then Long

NYMEX:CL2!   CRUDE OIL FUTURES (CONTINUOUS: NEXT CONTRACT IN FRONT)
ny journey is normally predetermined with some planning (what time is my bus, flight, train?, what time should I leave home, hotel?, where will I get fuel, accommodation, meals etc).
All sensible trading should have similar plans, and back up plans.

Lately I have noticed considerable ES activity outside US trading hours. This must scare some traders when they are spilling their morning coffee , and they see their long/short is 150 pts against them and their market hasn't even opened!

So today I thought I would share my plans for my oil journey.
Of particular note are three visible patterns: The ascending (flat topped) triangle at $66 (Resistance), the rising chanel, which we have been trading of late, and the Support line at $63.

Ascending triangles are considered consolidation patterns. They normally like three or more hits (about 2/3 length) before penetration, BUT it is NOT a triangle until after it has broken out.
In our case our lower channel boundary is the upward sloping radian, and the intersection occurs late May.

So we will buy on:
Pullback to our support line at $63; and/or
the lower upward sloping radian (between $62 and $63 until Apr 20).
Beware this date - it is Contract Expiry ( CL1! ... rem this chart is CL2! ) so expect churn during the preceeding week.
Our Stop is the swing Low of Apr 6 - a few pts below (say) $61.70
Post Apr 20 our Stop will sit a few pts below our $63 support or any higher swing lows that occur subsequently.
Our initial target is overhead Resistance at $66
Our Risk Reward becomes (66-63):(63-61.70) or 3 : 1.30

Watch for a coil to reverse a low on an incomplete retrace towards the lower channel line.

Upside breech and close above this Resistance then puts the triangle in play. Normall breech is followed by a pullback retest of the break out price.
So we would buy $66
Stop will be any swing low close below this breakout price
Target becomes the Resistance - radian low + Resistance (66-58)+66 or $74 but lets gets the break out first then we will concentrate on the next leg of our journey.
Comment: Ok this move was very quick and caught me by surprise.
From here the trading becomes clearer if we stick to the pattern rules.
Long/Cover on touch close above $66. Stop trade close below $65.90
This is our ascending triangle upper radian.
Short/Close on touch close of rising channel line at $68
We will simply trade the channel until it breaks.
There is circa $2 in this channel width so with 10c stops either side, it is a handsome "Risk : Reward" ratio.
... just a 2c update
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