
19 Dec 12192018 Trade Plan — Range Bound Trading
12192018 Trade Plan — Range Bound Trading
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 | Saturday | Sunday | Monday | Tuesday | Wednesday |
12/15/2018 | 12/16/2018 | 12/17/2018 | 12/18/2018 | 12/19/2018 | |
Beers night before | 8 | 3 | 3 | 5 | 2 |
Hours sleep | 7 | 7 | 7.5 | 6+1 | 8.5 |
Sleep well? | 3 | 3 | 2 | 2 | 2 |
Melatonin | 0 | 0 | 0 | 0 | 0 |
Negative thoughts? | 2 | 1 | 1 | 2 | 1 |
Exercise yester(to)day | 1 | 1 | 1 | 1 | 1 |
Gratitude | 5 | 5 | 5 | 4 | 5 |
Joy | 5 | 5 | 5 | 4 | 5 |
Anger | 1 | 1 | 1 | 1 | 1 |
Fear | 1 | 1 | 1 | 1 | 1 |
Focus | 2 | 3 | 3 | 2 | 2 |
Coffees today | 1 coffee | half a cup of coffee | 1 espresso spread over 2 hours | 0 | 1 espresso real quick |
Intermittent fasting | no | no | yes | no | no |
Water 2.2L bottles | 1 | 1 | 2 | 2 | 2 |
Vitamins | no | no | yes | yes | yes |
Time bed yesterday | 03:00 | 00:30 | 00:30 | 03:00 |
Health review (for the past week)
- How would you describe your overall health?
- My arm is hurting a bit again and I have still not made a doctor’s appointment. I’ll do that today.
- I have also not made an appointment for a general checkup.
- How do you feel?
- I feel good but feel not as sharp. Feel a bit groggy is the term I believe. Just not sharp for when you’ve slept too much. Actually, I didn’t sleep that much but took a sleeping pill last night to be able to sleep so that could be it.
- How would you rate it (1–5)?
- 3
The Big Picture (daily)
- What happened yesterday?
- After a period of VWAP expansion on the daily we tightened last week and last Monday we made a move to the 2.0 SD
- Yesterday we dropped even further outside of the 2.0SD and crossed the 47.50 level and the VWAP started expanding again
- Which could mean that we are in for a new down trend
- It seems that the market doesn’t agree with oil production cuts made by OPEC+ and the market is still in state of a surplus in supply
- What is the market sentiment?
- What does the crowd think?
- According to investing.com yesterday
- 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
- According to investing.com today
- All sentiments is 60% bullish
- Last week 63% bullish
- Last 3 days 61% bullish
- The sentiment shows a decrease in bullishness and compared to yesterday we see a drop of 1 point overall, drop 5 points on last week and 7 points in the last 3 days. That’s seems like a big shift in sentiment and the price reflects this
- According to investing.com yesterday
- What does the crowd think?
- EURUSD
- Yesterday’s range
- High 1.14016
- Low 1.13380
- According to IG
- 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
- Yesterday’s range
- Gold
- Yesterday’s range
- High 1250.42
- Low 1245.24
- According to IG
- 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
- Yesterday’s range
Intraday Fundamentals
- API report
- API report shows a build of 3.450M which would be bearish on the market so now the market will look at the EIA report to come out and confirm or reject this number
- EIA report
- EIA report hasn’t come out yet. It will come out later today.
- Geopolitics and the headlines of today?
- Libyan Oil In Jeopardy As Peace Talks Fail
- Libya’s NOC has shocked the oil market by officially declaring force majeure on its operations at the El Sharara oilfield, the largest oilfield in the country
- Months of optimism on a peace deal between the two competing governments that would increase oil production, which could mitigate the falling Iranian and Venezuelan production seems unlikely to happen
- The 315.000bpd field is blocked by protestors and militias in the area
- North Korean Oil Smugglers Elude U.S. Military
- Surprise Inventory Build Sends Oil Prices Even Lower
- The American Petroleum Institute (API) reported a surprise crude oil inventory build of 3.45 million barrels for the week ending December 14, compared to analyst expectations that we would see a draw in crude oil inventories of 2.475 million barrels.
- Iran Claims It Holds The Most Oil, Gas Reserves In The World
- According to the CIA World Factbook with data as at January 2017, Iran ranks fourth in the terms of biggest proved crude oil reserves in the world, behind Venezuela, Saudi Arabia, and Canada. In the natural gas proved reserves ranking, Iran is second behind Russia and ahead of Qatar and the United States.
- Offshore Drillers Bullish On 2019 Despite Falling Prices
- Upstream operators are set to sanction up to 50 new large oil and gas projects next year, up from 40 in 2018, with deepwater oil developments in Guyana and Brazil and liquefied natural gas (LNG) projects leading the way, energy consultancy Wood Mackenzie said this week.
- It’s Fed day
- The expectation is still for the Federal Open Market Committee to raise the federal funds rate by a quarter point to a range of 2.25% to 2.50%.
- Gold Ends a Touch Higher Ahead of Fed
- Investing.com — Every Federal Reserve meeting is important, but the current session will probably be the most telling since the March meeting that decided this year’s first rate hike. Consequently, gold traders hedged themselves on Tuesday with a slightly higher price move, awaiting the outcome.
- Libyan Oil In Jeopardy As Peace Talks Fail
- Additional OPEC news
- None at the moment
Intraday Technical Analysis
Tuesday | Wednesday | Thursday | Friday | Week | Monday | Tuesday | |
12/11/2018 | 12/12/2018 | 12/13/2018 | 12/14/208 | 12/10 — 12/14 | 12/17/2018 | 12/18/2018 | |
High | 52 | 52.827 | 53.242 | 53.146 | 53.455 | 52.145 | |
Low | 50.67 | 50.91 | 50.32 | 51.059 | 50.536 | 49.336 | |
Close | 51.925 | 51.17 | 52.821 | 51.398 | 51.449 | 49.458 | |
Pip move | 172 | 191.7 | 292.2 | 208.7 | 291.9 | 280.9 | |
PP | 51.662 | 51.636 | 52.128 | 51.868 | 51.813 | 50.313 | |
distance | 99.2 | 72.6 | 180.8 | 80.9 | 127.7 | 97.7 | |
R1 | 52.654 | 52.362 | 53.936 | 52.677 | 53.09 | 51.29 | |
distance | 172 | 191.7 | 292.2 | 208.7 | 291.9 | 280.9 | |
R2 | 53 | 53.553 | 55.05 | 53.955 | 54.732 | 53.122 | |
distance | -72.8 | -119.1 | -111.4 | -127.8 | -164.2 | -183.2 | |
S1 | 51 | 50.445 | 51.014 | 50.59 | 50.171 | 48.481 | |
distance | -172 | -191.7 | -292.2 | -208.7 | -291.9 | -280.9 | |
S2 | 50 | 49.719 | 49.206 | 49.781 | 48.894 | 47.504 | |
TV | 55,460 | 56,804 | 66,441 | 60,821 | 308,330 | 54,218 | |
50MA | 61.706 | 61.212 | 60.781 | 60.326 | 59.833 | 59.267 | |
200MA | 66.277 | 66.222 | 66.181 | 66.137 | 66.075 | 65.999 |
- What can we tell from the PP levels?
- We can see that we had a bigger drop of 378 ticks than we’ve had in recent times
- Also the PP levels have widened so there is room for bigger swings to happen
- Also, as opposed to last week we can see that PP levels have dropped significantly where the Daily resistance levels are at the same levels of the weekly support levels
- Where are the higher time frame S/R levels?
- We have a higher time frame support level at 42.90 which we are still ways away from but it’s possible that we might drop to that level
- A resistance could be the 47.50 we just crossed yesterday. It would be interesting to see if we confirm that as resistance
- What does the 4H and 30M chart show?
- We can see that yesterday we broke the 49.80 level
- How far away are we from technical levels?
S/R | kind | level | Distance |
R6 | 4H | 49.8 | 284.8 |
R5 | WS2 | 48.894 | 194.2 |
R4 | R1 | 48.724 | 177.2 |
R3 | Daily | 47.5 | 54.8 |
R2 | DPP | 47.422 | 47 |
R1 | 30M | 47 | 4.8 |
CURRENT | 46.952 | ||
S1 | 30M | 46.62 | -33.2 |
S2 | 30M | 46.25 | -70.2 |
S3 | DS1 | 44.944 | -200.8 |
S4 | DS2 | 43.642 | -331 |
S5 | Daily | 42.9 | -405.2 |
S6 | Depths of hell | 0 | -4695.2 |
- What has the Asian Session printed?
- After we dropped to the 46.20 level yesterday we inched higher and during today’s AS we found resistance at the 47 level
- Then we rejected it for a 2nd time and I took a short position that I quickly covered at a 8 tick profit
- ATR
- What is the ATR on the daily?
- Is it increasing/decreasing?
- 2.4452
- And it’s still decreasing indicating a possible agreement on direction of the market
- 2.4452
- Is it increasing/decreasing?
- What is the ATR on the daily?
Trade Plan
- I’ll be looking for PA to test the 46.62 level and possibly break that
- The next target would be the 46.25 level
- If we hit this level I’ll be looking to see if a swing reversal is a valid setup to take
- If not, I’ll be looking for a continuation on the BD
- If we find support at the 46.62 level and move back up I’ll be looking for a swing swing reversal setup at the DPP 47.22 level
- However, a continuation move might be possible as well. Although the DPP 47.22 level is a fairly critical resistance level since that is also the level we bounced off of yesterday before we broke it. So we might see a CAR play today
My goals for the day (Daily Report Card)
- Only take 4 trades (during London)
- Only take PlayBook trades
Reading the Tape
- What is printing? Look for PA with higher TV and S/R levels.
- Just before the London open we dropped to the 46.62 level which I indicated as a 30M S/R level and for now it looks like it might hold as support on the 5M
- Although the 30M looks quite bearish
- Spread has increased to range between 34 and 42
- 10:00
- London open and we’re moving up in a possible rejection of the 30M 46.62 level
- TV isn’t that much though with 245
- London open and we’re moving up in a possible rejection of the 30M 46.62 level
- We had a long-wicked candle at the open that looks bearish but I don’t have the confidence yet that we will actually BD the 46.62 level
- NEWS
- Forex — U.S. Dollar Slips as Traders Wait for Fed’s 2019 Rate Outlook
- Gold Prices Little Changed as Traders Await Fed Outlook
- It looks like we might be having a KC / VWAP divergence setting up
- If that is the case I will wait for the BO/BD and look for an entry in either a pullback MA or KC
- On the 30M chart we can see that we moved back into the KC while ranging between the 46.25 and 47 levels
- Spread is increasing and is ranging from 34 to 51
- 10:55
- We dropped to the 46.62 level
- 11:00
- We broke it with a candle going low as 46.36 but has been pushed back a lot and close at 46.53
- I’m going to wait for a confirmation of a reversal at this level and go long
- Since we moved back into the KC very quickly I hesitated to take a long position and might have missed the best R/R so will have to reassess where to get in IF I do get in still
- I think I am showing good restraint in not taking a position here
- Good thing since we dropped in a 50% retracement but then quickly shot back up again but that would have hit me emotionally
- I think I am showing good restraint in not taking a position here
- Spread is still 34
- Some interference at 46.85 level
- TV gone down after we spiked at the drop to 46.36 level. Then it was at 705
- We are now at a fraction of that
- 11:45
- We just spiked up an are testing the 47 level
- This could possibly be a BO from UKC
- With targets at 47.50 since that is the Daily resistance level after that we have DR1 48.724
- We didn’t break out and we started ranging between the 47 and 46.50 level
- Exactly within the widening KCs
- We started testing the 46.62 and bounced back up. PA seems a bit erratic and this might be where the algos are kicking in. So I’m gonna stay out of the market. KC has widened and so has the VWAP and we don’t seem to be getting in overbought/oversold positions for my setup signal to arise. I have noted that when VWAP follows the KC we might having ranging opportunities where u sell the highs and buy the lows.
- We returned with a swing high to the 47 level
- The 30M chart shows a lot of indecision at these levels which the 5M chart have shown as well.
- Just before the London open we dropped to the 46.62 level which I indicated as a 30M S/R level and for now it looks like it might hold as support on the 5M
Trade Management
Explain what trade you put on (include price, SL, TP) and what your thoughts are during the trade
- T1 (during the AS)
- Why? What do I see?
- Swing Reversal
- I saw a double rejection of the 46.95 level fairly quick after each other. And we had already rejected this level earlier in the AS
- Also the 30M touched the upper 2.0 SD after the cross from expanded VWAP to tightened.
- Entry 46.904
- Swing Reversal
- SL
- 47.019
- Few ticks above the highest wick
- TP
- 46.674
- Trade Management
- Covered at 5M VWAP 1.0 SD at 46.823
- Win 8 ticks
- Why? What do I see?
- T2
- NOT TAKEN
- 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 only took one trade and am happy with that. I covered at the next critical level and didn’t let the trade play out as much as it could.
- I learned a good lesson today and I’m going to take that into my backtesting. The setup I am going to look at is when the VWAP and KC expand together. This might be the market conditions for range bound trading. All in all a good day.
Daily Report Card
- Only take 4 trades (during London)
- I only took one trade during the AS
- Only take PlayBook trades
- Since none of my setups arose during the LS I didn’t take any trades and I am happy with being consistent
Feedback?
Any questions or feedback you might have please feel free to leave a comment or contact me directly.
No Comments