12182018 Trade Plan — Low liquidity trading after big drop

18 Dec 12182018 Trade Plan — Low liquidity trading after big drop

12182018 Trade Plan — Low liq­uid­i­ty trad­ing after big drop

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)

Per­son­al Checklist

5 pos­i­tive 1 negative	Fri­day	Sat­ur­day	Sun­day	Mon­day	Tues­day
12/14/2018	12/15/2018	12/16/2018	12/17/2018	12/18/2018
Beers night before	4	8	3	3	5
Hours sleep	6.5	7	7	7.5	6+1
Sleep well?	2	3	3	2	2
Mela­tonin	0	0	0	0	0
Neg­a­tive thoughts?	2	2	1	1	2
Exer­cise yester(to)day	1	1	1	1	1
Grat­i­tude	5	5	5	5	4
Joy	5	5	5	5	4
Anger	1	1	1	1	1
Fear	1	1	1	1	1
Focus	2	2	3	3	2
Cof­fees today	1 espres­so spread over 2 hours	1 cof­fee	half a cup of coffee	1 espres­so spread over 2 hours	0
Inter­mit­tent fasting	yes	no	no	yes	no
Water 2.2L bottles	2	1	1	2	2
Vit­a­mins	yes	no	no	yes	yes
Time bed yesterday	01:00	03:00	00:30	00:30	03:00

Health review (for the past week)

• How would you describe your over­all health?
  • I feel good most of the time. Just tired today because I stayed out late because of a meet­ing. Also had some drinks so def­i­nite­ly not on my sharpest today.
• How do you feel?
  • Feel good. I was think­ing to get some cof­fee but I am just going to ‘tough’ it out for the day and see what happens. 
• How would you rate it (1–5)?
  • 3

The Big Pic­ture (dai­ly)

• What hap­pened yesterday?
  • Yes­ter­day we had a big down day and we dropped to the 49.30 level
  • There was a Tri­an­gle form­ing on the 4H chart and we BD from that and even broke the 49.80 lev­el so the bears are hav­ing fun
  • The last few trad­ing days we were mov­ing away from the Dai­ly 2.0 SD and got close to the 1.0 SD but now we have dropped back into the 1.5 SD so let’s see if this lev­el can hold or that we drop further.
• What is the mar­ket sentiment?
  • What does the crowd think?
    • Accord­ing to investing.com today
      • All sen­ti­ments is 61% bullish
      • Last week 68% bullish
      • Last 3 days 68% bullish
      • Although sen­ti­ment has increased in bull­ish­ness I believe the bears will have their day in the sun first before the bulls can take over
• EURUSD
  • EURUSD: Retail trad­er data shows 58.1% of traders are net-long with the ratio of traders long to short at 1.39 to 1. In fact, traders have remained net-long since Nov 23 when EURUSD trad­ed near 1.1388; price has moved 0.2% low­er since then. The num­ber of traders net-long is 4.5% high­er than yes­ter­day and 10.1% low­er from last week, while the num­ber of traders net-short is 12.7% low­er than yes­ter­day and 8.7% low­er from last week.
  • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests EURUSD prices may con­tin­ue to fall. Posi­tion­ing is more net-long than yes­ter­day but less net-long from last week. The com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a fur­ther mixed EURUSD trad­ing bias.
  • MIXED BIAS
• Gold
  • Spot Gold: Retail trad­er data shows 77.7% of traders are net-long with the ratio of traders long to short at 3.49 to 1. The num­ber of traders net-long is 0.7% high­er than yes­ter­day and 5.5% high­er from last week, while the num­ber of traders net-short is 5.2% low­er than yes­ter­day and 3.1% low­er from last week.
  • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests Spot Gold prices may con­tin­ue to fall. Traders are fur­ther net-long than yes­ter­day and last week, and the com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a stronger Spot Gold-bear­ish con­trar­i­an trad­ing bias.
  • STRONG BEARISH BIAS
• Geopol­i­tics

Intra­day Fundamentals

• API report
  • For me this is com­ing out tomor­row morning
• EIA report
  • And this is com­ing out Thurs­day ear­ly morning
• What are the head­lines of today?
  • Shale Under Pres­sure As Oil Falls Below $50
    • The OPEC+ cuts still are not doing very much to boost oil prices, dash­ing hopes for many U.S. shale pro­duc­ers. With com­pa­nies in the process of for­mu­lat­ing their bud­gets for 2019, the prospect of $50 oil stick­ing around rais­es ques­tions about the heady pro­duc­tion fig­ures expect­ed from the shale patch.
  • Asia shares sink as glob­al growth wor­ries deepen
    • Asian share mar­kets sank on Tues­day as height­ened wor­ries about a slow­ing glob­al econ­o­my sent Wall Street stocks skid­ding to their low­est lev­els in more than a year.
  • Wall Street sell-off keeps Euro­pean shares near two-year lows
    • MILAN (Reuters) — A heavy sell-off on Wall Street sent Euro­pean shares tum­bling on Tues­day with oil stocks lead­ing the decline as crude prices extend­ed their loss­es and Roy­al Dutch Shell (AS:RDSa) tum­bled on reports of a pos­si­ble acquisition.
  • Gold Prices Slip as Focus Shifts to Fed
  • Sau­di Oil Min­is­ter Dis­cuss­es Fur­ther Coop­er­a­tion With World’s Largest Refiner
    • Sau­di Arabia’s Ener­gy Min­is­ter Khalid al-Fal­ih dis­cussed on Sun­day oppor­tu­ni­ties for joint invest­ments and coop­er­a­tion in petro­chem­i­cal and refin­ing projects with Mukesh Ambani, the chair­man of India’s Reliance Industries—the com­pa­ny own­ing the world’s largest refin­ing hub.
  • Euro ris­es as dol­lar wilts before expect­ed Fed caution
  • Oil Prices Mixed as U.S. Oil Pro­duc­tion Rises
    • Investing.com — Oil prices were mixed on Tues­day morn­ing in Asia, with WTI crude oil slip­ping below the $50 mark for the first time in a year on a surge of pro­duc­tion in the U.S. but Brent oil inch­ing higher.
  • Iran Claims Its Oil Rev­enues Surged Despite Sanctions
    • Iran’s rev­enues from crude oil and oil prod­ucts surged by 55 per­cent between March and Octo­ber, the first sev­en months of the Iran­ian year, com­pared to the same peri­od of the pre­vi­ous year, the Islam­ic Repub­lic News Agency (IRNA) report­ed on Mon­day, quot­ing data from the Cen­tral Bank of Iran. 
  • Growth Fears Push Gold to Largest Gain in 2 Weeks Ahead of Fed
    • Investing.com — Fears of a glob­al reces­sion are giv­ing gold an ear­ly boost ahead of this week’s Fed deci­sion on rate hikes, with the mar­ket brac­ing for a ral­ly should the cen­tral bank stall on an increase or even resort to dovish lan­guage after approv­ing one.
• How is the Geopo­lit­i­cal sta­bil­i­ty in the world?
  • It seems that the most con­cern is about the growth of world economics
• Addi­tion­al OPEC news
  • None at this moment

Intra­day Tech­ni­cal Analysis

Mon­day	Tues­day	Wednes­day	Thurs­day	Fri­day	Week	Mon­day
12/10/2018	12/11/2018	12/12/2018	12/13/2018	12/14/208	12/10 — 12/14	12/17/2018
High	52.78	52	52.827	53.242	53.146	53.455	52.145
Low	50.5	50.67	50.91	50.32	51.059	50.536	49.336
Close	50.871	51.925	51.17	52.821	51.398	51.449	49.458
Pip move	228	172	191.7	292.2	208.7	291.9	280.9
PP	51.384	51.662	51.636	52.128	51.868	51.813	50.313
R1	52.268	52.654	52.362	53.936	52.677	53.09	51.29
R2	53.664	53	53.553	55.05	53.955	54.732	53.122
S1	49.988	51	50.445	51.014	50.59	50.171	48.481
S2	49.104	50	49.719	49.206	49.781	48.894	47.504
TV	68,804	55,460	56,804	66,441	60,821	308,330	54218

• What can we tell from the PP levels?
  • Yes­ter­day we had about the same biggest swing as the whole of last week with 280 ticks
    • Most of this went into the down­side where we broke to new lows
• Where are the high­er time frame S/R lev­els? What does the 4H and 30M chart show?
  • The Dai­ly shows a sup­port lev­el at 47.50 and then 42.90
  • On the resis­tance side we have the 4H lev­el of 49.80
• How far away are we from tech­ni­cal levels?

S/R	kind	lev­el	Dis­tance
R6	WPP	51.813	258.8
R5	DR1	51.29	206.5
R4	30M	51.25	202.5
R3	DPP	50.313	108.8
R2	WS1	50.171	94.6
R1	4H	49.8	57.5
CURRENT	49.225
S1	WS2	48.894	-33.1
S2	DS1	48.481	-74.4
S3	DS2	47.504	-172.1
S4	Dai­ly	47.5	-172.5
S5	4H	45.1	-412.5
S6	Dai­ly	42.9	-632.5

• What has the Asian Ses­sion printed?
  • Dur­ing the AS we found tem­po­rary sup­port at the 49 lev­el which is also the WS2 48.894 level
    • We bounced off this lev­el and failed to make new highs
• ATR
  • What is the ATR on the daily?
    • Is it increasing/decreasing?
    • 2.4327
      • It seems we are still decreas­ing in ATR which is a good sign cause that might mean that we are set­tling on a direction 

Trade Plan

• I’m going to wait and see how PA reacts to the WS2 48.894 or resis­tance at 49.80 level
• It is like­ly that we will con­tin­ue to inch low­er a bit before return­ing. I think we are in the exhaus­tion leg part on the 4H chart so we might be look­ing to find sup­port after a big drop and then reverse. 

My goals for the day (Dai­ly Report Card)

• Only take 4 trades
• Only take play­book trades
• Be extra cau­tious today because you are not as sharp and the mar­ket seems to be in a bit of a state of limbo

Read­ing the Tape

• What is print­ing? Look for PA with high­er TV and S/R levels.
  • After the open we inhed high­er a bit and the at 10:55 we dropped and con­tin­ued the drop at 11:00 and are now test­ing the 48.90 level
  • We dropped fur­ther break­ing the WS2 48.894 and halt­ed at the DS1 48.481 for tem­po­rary support
  • When we dropped the spread increased like crazy. When nor­mal­ly at 28/29 I saw it increase to 100 and now it’s back to 34/35 which means the liq­uid­i­ty today is low
  • I am wait­ing for con­fir­ma­tion on the DS1 48.481 to hold up as sup­port or a poten­tial break
  • The 5M VWAP has entered the tight­en­ing phase again and the 30M shows we reject­ed the 2.0 SD fair­ly big and then PA hov­ered between the WS2 and DS1 level
  • The 5M shows that we returned to the LKC after cross­ing the VWAP mean so we might be look­ing to get back into the KC
  • NEWS
    • Euro­pean shares plunge after Wall Street’s ‘San­ta Crash’
      • MILAN (Reuters) — Euro­pean shares tum­bled on Tues­day after a sell-off on Wall Street, with oil stocks lead­ing the drop as crude prices extend­ed their loss­es and Roy­al Dutch Shell (AS:RDSa) fell after reports of a pos­si­ble acquisition.
      • The pan-Euro­pean STOXX 600 (STOXX) index was down 0.6 per­cent by 0857 GMT, get­ting clos­er to the two-year lows hit last week, as con­cern mount­ed over slow­ing eco­nom­ic growth.
      • A speech by Chi­nese Pres­i­dent Xi Jin­ping that investors had hoped could lift morale had no impact. Atten­tion shift­ed to the Fed­er­al Reserve, which is almost cer­tain to raise inter­est rates at the end of its two-day meet­ing on Wednesday.
      • Traders will be watch­ing the Fed’s pro­jec­tions for future rate increas­es, which could boost equities.
  • PA retraced back to 48.90 lev­el and we are cur­rent­ly still over the 5M VWAP mean
  • The spread is still high at 34 and since it’s almost 14:30 I don’t think I’ll be tak­ing any trades at this point. So I’m going to wrap this up for today. 

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?
    • Swing Rever­sal
      • Took a long posi­tion right at the open after I saw a doji can­dle at the bot­tom of the range at the 49.10 lev­el (which we reject­ed ear­li­er dur­ing the AS
      • Also the rejec­tion point coin­cid­ed with the 30M 2.0 SD touch
      • I took a small posi­tion since it was at the open and I had nev­er done that
      • Entry
        • 49.189
  • SL
    • 49.060
      • Just under the wick
  • TP
    • 49.473
      • At the top of the range
  • Trade Man­age­ment
    • Cov­ered when we hit the VWAP mean

• T2
  • Why? What do I see?
    • Swing Rever­sal with continuation
      • After we reject­ed the 48.30 lev­el we inched high­er and then we made a first pull­back that closed above the 5MA so expect­ed anoth­er move up to at least the VWAP mean
      • How­ev­er, since the spread is high­er than usu­al and we had already inched high­er I took the small­est posi­tion I could take to be extra cautious
      • Entry
        • 48.633
  • SL
    • Under the pull­back at 48.50
  • TP
    • 48.938
  • Trade Man­age­ment
    • I added to my posi­tion when I saw it go in my favor

• T3
  • Why? What do I see?
    • Same as T2
      • Entry
        • 48.727
  • SL
    • Under the pull­back at 48.50
  • TP
    • 48.945
  • Trade Man­age­ment
    • I cov­ered both posi­tions T2 and T3 when we reached the 5M VWAP mean at a prof­it of 
      • T2 — 15 ticks
      • T3 — 4 ticks

• T4
  • Why? What do I see?
    • Swing Rever­sal / Swing Rever­sal with con­tin­u­a­tion / Squeeze
  • SL
  • TP
  • Trade Man­age­ment

Trade Review

• Did you let your trade play out or did you cov­er or stop out soon­er? If so, why?

Dai­ly Report Card

• Only take 4 trades
  • I took 3 trades
• Only take play­book trades
  • I took a swing rever­sal and con­tin­u­a­tion trade
• Be extra cau­tious today because you are not as sharp and the mar­ket seems to be in a bit of a state of limbo
  • I low­ered my size even more since the mar­ket seemed to behave dif­fer­ent than usu­al with the spreads being wider I feared there would be no pulling through on the move. Over­all I am hap­py with my per­for­mance today con­sid­er­ing that I was also not the sharpest today.
  • Anoth­er thing I will focus on is writ­ing out my roadmap to becom­ing a CPT (con­sis­tent­ly prof­itable trad­er) so that I have a clear­er under­stand­ing of the path before me.
  • I am up 25 ticks for the day

Feed­back?

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

oil, wti, crude oil, crude, day trad­ing, day­trad­ing, com­modi­ties, play­book, one good trade,