WTI 2018-11-24 Retrospective of a failed trade

TVC:USOIL   CFDs on WTI Crude Oil
As a note, the posts that I’ve been making are based on study of the book “Secrets of a Pivot Boss: Revealing Proven Methods for Profiting in the Market”

If you wish to setup charts to follow this, the configurations I use are as follows:

I have one double chart with a 5 minute chart on left and a 30 minute chart on right. On the left toolbar, I’ve selected for the drawing object to be synchronized (it looks something like (-) just above the trashcan). I only draw on the 30 minute chart. I also use a daily chart but will go through that configuration in a separate post. I have the same indicators on both charts:

‘Pivot Points Standard’ from the built-in library
On Inputs tab: Type|Camarilla, Show Historical Pivots|checked, Pivots Timeframe|Daily, Number of Pivots Back|3
On the style tab: Show Labels|Checked, P|unchecked, S1/R1|unchecked, S2/R2|unchecked, S3/R3|Checked (dark blue), S4/R4|checked (red)

‘EMA(20, close) from the built-in library

‘Session Volume’ from the Volume Profile library
On Inputs tab: Rows Layout|Number of Rows, Row Size|24, Volume|Up/Down, Value Area Volume|70, Extend POC Right|checked
On the Style tab: Volume Profile|checked, Show Values|unchecked, Width|30, Placement|Left, POC|checked (dark blue dashed), Developing POC|unchecked, Developing VA|unchecked, Up Volume|bright green, Down Volume|birght red, Value Area Up|dark green, Value Are Down|dark red

On Friday, I noted that price had moved through the S3 and S4 levels out of the initial balance ( IB ). I use the first 5 bars on 30 minute chart to determine the IB . At the time, I thought that the short and long term Stoch was oversold and was thinking price would pull back up higher to get a short entry. I also added an alert in the S4 level in case price dropped through it. As it turns out, price did drop through, and my alert went off. Unfortunately, I was asleep and by the time I reacted to it (actually it was my wife who heard it and was not amused), price had closed one candle below S4 and well into the next. I tried to enter market but was not comfortable with level I was in at (I trade crude oil with options (I only buy OTM calls/puts)). As price corrected, I didn’t want to hold the position and go back to sleep so I closed with a small profit. As it turns out, you know what price did after that.

One of the types of market days I was looking for was ‘double-distributed trending day’ (from the book). To be clear, Stoch’s and Directional Movement Indicator are not in the book but a hold over crutches I’m using. As it turned out, they hurt more than they helped as I misinterpreted them. Going forward, I’ll be removing them from my charts. What I should have been doing is paying attention to the Camarilla pivots and noticed that after the initial drop through S4, price traded between the S3 and S4 levels with tests against S3 met with selling (clear separation indicated by large wicks at top of candle). This should have been the area to go short with a low risk move of a stop above S3. Based on the book, responsive buyers would have come in at S3 pushing price back up to value while initiative sellers would have come in below S4 (which they did). As part of my lesson, I’m going to try next few weeks without indicators and only trade off the Value Areas and Price action along with the Camarilla pivots . Later this weekend, I'll publish what I think plan for Monday will be along with a daily chart and setup I'm using on it.

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Alexei Vsevolod
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