07 Dec 12072018 Trade Plan — Indecisive market in anticipation of OPEC+ decision

12072018 Trade Plan — Inde­ci­sive mar­ket in antic­i­pa­tion of OPEC+ decision

 

Ter­mi­nol­o­gy (par­tial­ly made up by yours truly)

• PA = Price Action
• BO = Break Out
• BD = Break Down
• CAR = Con­firm As Resistance
• CAS = Con­firm As Support
• UKC = Upper Kelt­ner Channel
• LKC = Low­er Kelt­ner Channel
• TV = Tick Volume
• WPP = Week­ly Piv­ot Point
• DPP = Dai­ly Piv­ot Point
• DR = Dai­ly Resis­tance (piv­ot)
• DS = Dai­ly Sup­port (piv­ot)
• WR = Week­ly Resis­tance (piv­ot)
• WS = Week­ly Sup­port (piv­ot)
• HL = High­er Low
• HH = High­er High
• LH = Low­er High
• LL = Low­er Low
• SD = Stan­dard Deviation
• VWAP = Vol­ume Weight­ed Aver­age Price
• AS = Asian Session
• LS = Lon­don Ses­sion (EU)
• NY = New York Ses­sion (US)
• TP = Take Profit
• SL = Stop Loss

 

Per­son­al Checklist

 

5 pos­i­tive 1 negative	Sun­day	Mon­day	Tues­day	Wednes­day	Thurs­day	Fri­day
	12/02/2018	12/03/2018	12/04/2018	12/05/2018	12/05/2018	12/06/2018
Beers night before	12	0	0	0	1 fin­ger whiskey	1 fin­ger whiskey
Hours sleep	5	7	8	8	8	7.5
Sleep well?	1	2	3	2	3	3
Mela­tonin	0	0	0.5	0	0	0.25
Neg­a­tive thoughts?	1	2	2	2	2	2
Exer­cise yester(to)day	1	1	1	1	1	2
Grat­i­tude	5	5	4	4	5	5
Joy	5	5	4	4	5	5
Anger	1	1	1	1	2	1
Fear	1	1	1	1	2	1
Focus	2	2	3	3	3	4
Cof­fees today	1	1	2 espres­sos	1 espres­so	1 espres­so spread over 2 hours	1 espres­so spread over 2 hours
Water 2.2L bottles	1	2	2	2	2	2
Vit­a­mins	no	yes	no	yes	yes	yes
Time bed yesterday		00:00	11:00	11:00	11:00	11:00

 

Health review (for the past week)

• How would you describe your over­all health? 
  • I feel good even though my throat hurts a bit and I’m not sure what it is so I start think­ing the worst things that it could be and I know I shouldn’t… Get­ting bet­ter at it. It starts with iden­ti­fy­ing that you are doing it and then sim­ply tell your­self to stop doing it and focus. Easy huh 🙂
  • Anoth­er thing is that I feel like my ener­gy lev­els are more up again so def­i­nite­ly feel­ing I am get­ting in a health­i­er rhythm.
• How would you rate it (1–5)?
  • 4

 

The Big Pic­ture (dai­ly)

• What hap­pened yesterday? 
  • Yes­ter­day it ini­tial­ly seemed the bears were in charge before the OPEC+ meet­ing but then when it was released that there was going to be a cut of 1 mbpd we saw the bulls com­ing into the market
  • I feel that usu­al­ly the mar­ket knows already what the out­come of the meet­ing is going to be and there­fore was prepar­ing for it by get­ting on or get­ting out. Let’s see if that was the case
  • Yesterday’s close was a slight bull­ish sign and there was huge TV on it of 351K but that doesn’t mean that we will con­tin­ue that direc­tion dur­ing the Asian ses­sion and Lon­don ses­sion today, or NY for that mat­ter. Let’s wait and see.
• What is the mar­ket sentiment? 
  • What does the crowd think? 
    • Accord­ing to investing.com yesterday 
      • All sen­ti­ments is 57% bullish
      • Last week 60% bullish
      • Last 3 days 61% bullish
    • Accord­ing to investing.com today 
      • All sen­ti­ments is 58% bullish
      • Last week 63% bullish
      • Last 3 days 62% bullish
    • So we have a slight­ly more bull­ish sen­ti­ment accord­ing to investing.com but keep in mind that this does not mean we found a bot­tom here
• EURUSD
  • It looks like EURUSD is mov­ing into the apex of a tri­an­gle and soon we could be look­ing at a BO or BD 
    • Could the unem­ploy­ment rate or non-farm pay­rolls be the cat­a­lyst? Or per­haps the trade war with Chi­na again that has been a hot issue with the arrest of Huawei’s CFO?
  • Price range is 1.132 and 1.141
• Gold
  • Gold has hit 1240 lev­el and looks to per­haps take a breather how­ev­er it could still go till 1255 before it hits a big­ger time frame resis­tance again. If we do reverse the next sup­port lev­el is at 1180
  • Sen­ti­ment accord­ing to investing.com is 64% in the last 3 days
• Geopol­i­tics
  • Chi­na US trade war looked to be ton­ing down but then after the arrest of Huawei’s CFO that is risk­ing to flare up again 
    • Rea­son for arrest pos­si­ble break­ing of sanc­tions against Iran
  • Reject­ing sug­ges­tions of delay, UK PM May’s team says Brex­it vote will go ahead
  • Rus­sia must scrap or alter mis­siles U.S. says vio­late arms treaty
  • U.S. fails to win enough sup­port at U.N. to con­demn Hamas
  • Merkel’s par­ty votes for new leader, and new era in Germany

 

Intra­day Fundamentals

• • API report
    • Pre­vi­ous 3.453M
    • Actu­al 5.360M
    • So there was more of a build than pre­vi­ous­ly expected
  • EIA report
    • Pre­vi­ous 4.851M
    • Fore­cast 0.769
    • Actu­al 3.577M
    • So we have way more build than was fore­cast so expect more sell­ing pres­sure to come in
  • What are the head­lines of today? 
    • Iraq being the sec­ond largest oil pro­duc­er and one of Iran’s largest trade part­ners might enjoy longer sanc­tion waivers from Washington
    • OPEC Talks End With­out Oil-Cuts Deal as Rus­sia Holds Back 
      • Not every­body ready to cut equally
    • Iran Hopes Iran­ian-EU Oil Trade Mech­a­nism To Start Work­ing By Year-End 
      • Iran hopes that the spe­cial pur­pose vehi­cle that would allow the Euro­pean Union (EU) to con­tin­ue buy­ing Iran­ian oil amid the U.S. sanc­tions will become oper­a­tional by the end of this year
    • Frac­tured OPEC Walks Away From The Table 
      • After six hours of dis­cus­sions, OPEC didn’t agree on Thurs­day on any spe­cif­ic oil pro­duc­tion cut agree­ment as mem­bers are quar­relling on how to divvy up the pro­duc­tion cuts and who will be exempt from reduc­ing out­put, while all signs point to the car­tel wait­ing to see how much Rus­sia will agree to cut before announc­ing a pos­si­ble deal.
      • Let’s see if they can come to an agree­ment today
    • Maduro: Rus­sia, Venezuela Sign $5B Deals To Boost Venezue­lan Oil Production 
      • Back from a vis­it to Moscow, Venezue­lan Pres­i­dent Nico­las Maduro tweet­ed a video on Thurs­day, in which he said that Venezuela and Rus­sia have signed US$5‑billion invest­ment deals to increase oil pro­duc­tion in the Latin Amer­i­can country.
    • The U.S. Just Became a Net Oil Exporter for the First Time in 75 Years

 

• NEWS FLASH

• Agreed on 900.000 to 1 MBPD and press release will come soon

 

• • • • They said that yes­ter­day as well so let’s wait for the offi­cial press release
      • Such bull­shit by Bloomberg, how can they when OPEC+ is still con­sid­er­ing the deal and shar­ing of cuts

 

Intra­day TA

 

	Thurs­day	Fri­day	Week	Mon­day	Tues­day	Wednes­day	Thurs­day
	11/29/2018	11/30/2018	11/26 — 11/30	12/03/2018	12/04/2018	12/05/2018	12/06/2018
High	52.165	51.765	52.525	53.83	54.537	54.42	53.28
Low	49.385	49.625	49.385	50.555	52.405	52.125	50.055
Close	51.235	50.555	50.555	53.06	52.57	52.91	51.694
Pip move	278	214	314	327.5	213.2	229.5	322.5
PP	50.928	50.648	50.822	52.482	53.171	53.152	51.676
R1	52.471	51.671	52.259	54.409	53.937	54.179	53.297
R2	53.708	52.788	53.962	55.757	55.303	55.447	54.901
S1	49.691	49.531	49.119	51.134	51.805	51.884	50.072
S2	48.148	48.508	47.682	49.207	51.039	50.857	48.451
TV	168,514	174,565	1,008,709	211,252	141,633	102,902	351,292

 

• What can we tell from the PP levels? 
  • Even though we went up a bit yes­ter­day we dropped in in the DPP so did resis­tance and sup­port levels
  • We had a big­ger intra­day swing though with 322 pips due to the expec­ta­tions and announce­ment of OPEC+ meet­ing I believe
• Where are the high­er time frame S/R levels? 
  • Yes­ter­day we found sup­port at the week­ly time frame 50.40 lev­el that we bounced off last week as well before we start­ed retrac­ing on the bear run from the last 2 months 
    • And we’ve been rang­ing between 50.40 and 53.75 both of which are high­er time frame levels
  • Ques­tion is will this lev­el hold because if it doesn’t we might find the next big sup­port lev­el to be at the 46.50 level
  • The 4H chart shows we have anoth­er inter­fer­ence at 52.55 the lev­el that was also crit­i­cal yesterday 
    • Yes­ter­day we broke that lev­el and we are now rang­ing between 50.40 and 52.55 since yesterday
• What has the Asian Ses­sion printed? 
  • On the 30M chart we can see that we dropped till the 30M VWAP mean and are now hug­ging the mean and might be look­ing for a squeeze here 
    • The 5M chart def­i­nite­ly shows PA trad­ing flat and a squeeze seems likelier
• ATR
  • What is the ATR on the daily? 
    • Is it increasing/decreasing?
      • ATR is still increas­ing and is now 2.5193
      • So the bat­tle between bulls and bears is get­ting more intense so let’s wait and see who wins

Trade Plan (added dur­ing the Lon­don ses­sion. I for­got to include this in my tem­plate and thus didn’t see it when I was prepar­ing but that is still no excuse)

• If we are rang­ing between 51.10 and 51.80 I’m gonna focus on short­ing near the 51.80 and look­ing for long oppor­tu­ni­ties near the 51.10
• If we break the 51.10 I am going to look for BD opportunities 
  • Next sup­port would be 50.80 and then 50.50

 

My goals for the day (Dai­ly Report Card)

• Only take 4 trades
• Only take PB setups (swing rever­sal, swing rever­sal with con­tin­u­a­tion, squeeze)
• Only trade what you see

 

Read­ing the Tape

• • What is print­ing? Look for PA with high­er TV and S/R levels. 
    • The last few hours dur­ing the AS we made a lot of low­er and upper wicked can­dles. What do I mean by that? It looks like there’s a lot of inde­ci­sion in the mar­ket at this point and if this con­tin­ues I won’t be mak­ing a trade today. 
      • This is prob­a­bly due to OPEC+ meet­ing con­cerns on the out­come on cuts etc.
      • This all hap­pened just above the 51 level. 
        • When we look at the 30M chart we can see that yes­ter­day we had a clus­ter of can­dles (this is what I call swings of PA close togeth­er) and now we are at the bot­tom of the cen­ter range of that same clus­ter. So there’s def­i­nite­ly chance we could drop fur­ther or we could bounce off this lev­el and start rang­ing between 51.10 and 51.80 if we break 51.50 as well
    • On the 5M chart we can see a clear down­trend­ing KC so can we don the 30M
    • Even though we pushed back up from the 50.50 lev­el yes­ter­day we are still not in the clear when it comes to the con­trol by the bears.
    • 10:10 (16:10) we just spiked up hit­ting the 5M UKC / 30M VWAP mean
    • 10:20 we are test­ing the 5M KC on low­er TV 
      • If we break this lev­el the next resis­tance is 51.80 which would also be the 30M 2.0 SD
      • Also PA seems faster than usu­al what I deem more com­fort­able to trade in but I’m not going to let that hold me back. Just going to be more cautious.
    • 10:25 we quick­ly dropped to 5M VWAP mean and with that we closed the 30M can­dle very bear­ish with a long upper wick and small­er body at the bot­tom which could mean we are reject­ing this 51.50 level

 

• My bias is towards the short side

 

• • • I’m going to take even small­er posi­tions since the mar­ket con­di­tions are very volatile

 

• NEWS FLASH

 

• • • • OPEC Goes Back Into Crunch Talks as Rus­sia Resists Big Oil Cut 
        • “Not every­body is ready to cut equal­ly,” Al-Fal­ih told reporters in Vien­na. “Rus­sia is not ready for a sub­stan­tial cut.”
        • Iran appears to be the main obsta­cle for an OPEC oil out­put deal on Fri­day as the group’s leader Sau­di Ara­bia has yet to agree exemp­tions for sanc­tions-hit Tehran, two OPEC sources said.
    • Good thing I didn’t take a short posi­tion at the 5M VWAP mean because we just shot up and over the LKC and are test­ing the 30M 2.0 SD at the moment
    • 10:40: Weird that we shot up so much. Anoth­er rea­son to be extra cau­tious. We are test­ing the 51.80 lev­el now.
    • We reject­ed the 51.80 lev­el and are look­ing to get back into the 5M KC now and break­ing the 13MA
    • I stat­ed ear­li­er that my bias was short but I still went long. That is a no no. I should have only been look­ing for shorts which the 51.80 lev­el was. That would have been a great oppor­tu­ni­ty but I don’t feel too con­fi­dent in catch­ing those ceil­ing before the drop.
    • We just dropped to the 5M VWAP mean and it’s look­ing to break and I want­ed to take a short but then hes­i­tat­ed so still try­ing to feel more con­fi­dent in this envi­ron­ment. The hes­i­ta­tion came when I looked at the 30M we had also dropped to the VWAP mean there. 
      • We did drop at this lev­el but I am still hap­py for not tak­ing that trade because it wasn’t a clear oppor­tu­ni­ty and with PA being so errat­ic today I decid­ed to be extra cautious.
    • 11:20 It’s a big drop though and we are test­ing 51.10 lev­el again
    • 11:30 we just had a spike drop to 50.80 lev­el (which is also the WPP lev­el by the way) in a crazy mil­lisec­ond drop and are pos­si­bly look­ing to reject this lev­el which would allow me to take a pos­si­ble long trade here but I am still try­ing to feel out the market. 
      • We topped over 1000 TV on this par­tic­u­lar move. Which makes sense. This could be the big guys stop­ping out the small guys and load­ing up for a poten­tial bull run afterwards.
      • If we reverse here I will wait for a pull­back and will do the same if we BD at this level
    • It looks like the almost oppo­site of what hap­pened at the 51.80 lev­el we are hav­ing the same at the 50.80 lev­el and we seem to reject this lev­el as well. 
      • Again this 50.80 lev­el coin­cides with the 30M 2.0 SD and the 5M LKC and 2.0 SD so a long posi­tion would have been war­rant­ed but I am put off by the mar­ket behav­iour. I also don’t think we’ll have that pull­back like we didn’t have that before at the 51.80 level
    • Could this be run for the 5M VWAP mean to CAR and then reverse again?
    • The 30M shows inde­ci­sion so does the 4H but that one still has a lit­tle over an hour left in the can­dle so doesn’t mean much at the moment.
    • I’m going to sit back and try and learn from today’s ses­sion. I am also record­ing this and will cat­e­go­rize this as an inde­ci­sive mar­ket in expec­ta­tion of OPEC’s agreement.

 

• NEWS FLASH 15 min­utes ago

 

• • • • Iran seeks exemp­tions as OPEC awaits approval from Rus­sia to impose pro­duc­tion cuts
      •     The 15-mem­ber orga­ni­za­tion will hold talks with allied oil-pro­duc­ing nations at its head­quar­ters in Vien­na, Aus­tria on Friday.
      •     It comes after deep divi­sions in the ener­gy alliance were laid bare at a close­ly-watched meet­ing on Thurs­day, with the group unable to agree on the terms of crude out­put cuts.
      •     Inter­na­tion­al bench­mark Brent crude briefly climbed above $60 a bar­rel Fri­day morn­ing, as OPEC del­e­gates report­ed­ly said the group would dis­cuss a pos­si­ble exemp­tion from out­put cuts for Iran. 
        • So still await­ing con­clu­sive news from OPEC
    • We just shot up to the 5M VWAP mean at 11:50 (17:50) and are look­ing to break it
    • We start­ed con­sol­i­dat­ing just on top of the 5M VWAP mean with long wicked candles 
      • Then we had a BO at  12:25 (18:25) to 5M 1.0 SD but then quick­ly reversed. And what looks like a bull­ish can­dle turns out to be bear­ish after­wards and vice ver­sa. So once again more con­fir­ma­tion that I am going to stay out of the market
    • 12:55 (18:55) We start­ed test­ing the 51.80 lev­el again and got imme­di­ate­ly pushed back but might actu­al­ly break it since we are look­ing to test it again
    • We end­ed up reject­ing the 51.80 and have dropped back to 51.50 lev­el that coin­cides with 5M and 30M VWAP mean
    • Now we could be rang­ing between 51.50 and 51.80 in a in what looks like anoth­er triangle
    • 14:10 (20:10) Retest­ing the 51.80 again

 

• NEWS FLASH 10 min­utes ago

 

• • • OPEC talks stall as Saud­is refuse to exempt Iran from oil cut 
      • “Iran will insist on an exemp­tion until sanc­tions are removed,” one of the OPEC sources said. Anoth­er source said Tehran want­ed an OPEC com­mu­nique to spec­i­fy that Iran was exempt from cuts.
    • Read more at https://www.channelnewsasia.com/news/business/opec-talks-stall-as-saudis-refuse-to-exempt-iran-from-oil-cut-11010830
  • 14:20 (20:20) And we broke the 51.80 lev­el and we are at the 52 lev­el and I won­der if we have enough momen­tum to break the 4H 50MA or that we bounce off this lev­el and reverse back down 
    • Next resis­tance is at WR1 52.25 and then the 4H resis­tance at 52.55 that we test­ed yesterday
    • And no… we failed to actu­al­ly break the 52 lev­el and then reversed to 51.80
      • Could this be a CAS?
      • We are hav­ing anoth­er small­er tri­an­gle at this lev­el just 10 min­utes before NY open
  • It is NY open time and that means I’m done trad­ing for the day. All in all a good day I’d say. I learned a lot and will dis­cuss more in underneath.
  • NY SHOT UP CRAZY and is test­ing 52.55 and look­ing to break that. I’ll come back tomor­row and see how this has devel­oped so I can plan for next week which I’ll of course share with you.

 

Trade Man­age­ment

Explain what trade you put on (include price, SL, TP) and what your thoughts are dur­ing the trade

 

• T1

• Why? What do I see?

 

• • • • Squeeze
        • I entered late on this but the rea­son why I entered was that I saw a squeeze set­up had played out and I thought there would be an con­tin­u­a­tion of it after reject­ing 13MA and the VWAP mean with a very bear­ish candle 
          • So I entered very poor­ly at the bot­tom of the range
          • Don’t think I’d take this trade again
        • Entered at 51.634

 

• SL

 

• • • • I put SL very high at 51.899 because I saw that we we’re mak­ing errat­ic moves dur­ing the AS but I was still bear­ish on the 30M chart and did­n’t wan­na get stopped out as had hap­pened many times. Get stopped out and then the mar­ket moves into my favor which hap­pened here as well.

 

• TP

 

• • • • 51.393
        • I put the TP fair­ly wide above the 30M VWAP mean which was on the same lev­el as the cen­ter of the pre­vi­ous clus­ter of can­dles on the 30M (which after a BD I see price hit­ting that lev­el more often than not)

 

• Trade Man­age­ment

 

• • • I walked away from my screen which was prob­a­bly a good thing because I hit my TP. If I had watched my screen I would have prob­a­bly got out ear­li­er so this is def­i­nite­ly some­thing I have to work on. Either train myself to walk away from my screen or train myself to with­stand impuls­es and just let my trade work itself out. At this moment I am more in favor of the last since this is more hard in my opin­ion and why not try and con­quer this emo­tion­al bat­tle and be more Zen 🙂

 

 

• T2

• Why? What do I see?

 

• • • • UKC BO
      • 10:55: Took a long after the we shot up over the UKC on the 5M and pulled back to the 5MA as that is my set­up but it feels coun­ter­in­tu­itive because of the ‘weird’ feel­ing in the mar­ket because of inde­ci­sion in my opinion
      • I took a small­er than usu­al posi­tion to feel the mar­ket out a bit with a tight stop
      • Entry: 51.660

 

• SL

 

• • • • 51.532

 

• TP

 

• • • • 51.787

 

• Trade Man­age­ment

 

• • • I saw that PA was break­ing the 5MA and I still stayed in the trade because of the off behav­iour of PA today thought it might not fol­low ‘rules’ as clear­ly. Then price dropped and took out my stop and I’m OK with that. Since I did it in a con­trolled fashion.
    • And we are look­ing to drop back into the 5M KC now.

 

 

• T3

• NOT TAKEN

 

 

 

• T4

• NOT TAKEN

 

 

Trade Review

• Did you let your trade play out or did you cov­er or stop out soon­er? If so, why? 
  • I think I did well today. This morn­ing dur­ing the AS I saw an oppor­tu­ni­ty and thought to grab it and because I wasn’t sit­ting in front of my screen it actu­al­ly got the chance to hit my TP at a good prof­it of 24 pips 
    • As a future goal I have deter­mined for myself that I will first focus on trad­ing my setups and not wor­ry as much about the tak­ing prof­it part until I get con­sis­tent in only trad­ing my setups.
    • Then after­wards I will focus on let­ting my win­ners run until they hit the rules I have set out for them. If, and only if, then I see that this is too hard for me to do I will con­sid­er to try out a tri­al of putting on a trade and sim­ply walk­ing away to check it lat­er on. For now I will stick with my cur­rent plan and will decide later.
  • When I saw that PA was ter­ri­bly errat­ic, more so than in pre­vi­ous days, I decid­ed to be extra cau­tious and put on small­er risk. This lead into me tak­ing a trade that got stopped out which I’m hap­py with since I decid­ed to test the mar­ket a lit­tle bit to get a feel for it and got stopped out. After­wards I kept track­ing the mar­ket but not tak­ing trades since I could not get in synch with the market.
  • All in all a good day.

 

Dai­ly Report Card

• Only take 4 trades 
  • I only took 2 trades so that’s good. I tru­ly believe that this rule is mak­ing me more con­scious about what risk to take on
• Only take PB setups (swing rever­sal, swing rever­sal with con­tin­u­a­tion, squeeze) 
  • I’m doing good here as well how­ev­er, I did real­ize that for cer­tain oppor­tu­ni­ties I have to think of a new Play­Book name. For exam­ple the swing rever­sal with con­tin­u­a­tion can extend to over the oth­er KC and if I haven’t got­ten in yet I can take the first pull­back after the BO/BD and then it doesn’t feel like a swing rever­sal with con­tin­u­a­tion any­more but a KC BO/BD set­up. I’ll dis­tin­guish this in my back­test­ing as well.
• Only trade what you see 
  • I did good on this as well since what I saw was­n’t some­thing I could make sense out of so I decid­ed to try with less risk put on and then just decid­ed to not trade at all.
  • I think this has def­i­nite­ly been a good day.

 

Feed­back?

Any ques­tions or feed­back you might have please feel free to leave a com­ment or con­tact me directly.