Trendfollowing in stocks, indices, forex and commodities

Hi!

I started trading a couple of years ago, and I`ve had a strike of luck in stocks, followed by a strike of reality (I`m still up, but large losses lately). I`ve been trading energystocks, and had a nice run last year. Now I`m not to into the particular companies as it takes very much time to get the overview. I try to do like Jesse Livermore on this, - to pick the leaders, but in these uncertain times, it`s not very easy to decide what a good leader is. Take the finance industry, og the automotive, - there is no teling just yet who made the right bets! This is partly why I turned to trading oil instead of oil companies.

I don`t have any experience with commodities trading, but I see long moves in the same direction, and this is what attracts me. The only commodity I`m trading is crude oil. I don`t want to have to care about natural disaters or weather affecting cornprices. Oil is a very trendy market, and the volatility suits my trading style.

Forex has not treated me to well, and I can say that I have trouble controlling the urge to take a position everytime I look at a forexchart. This is plain stupid, and it makes me loose my money. This is one of the reasons that I`m making this journal. To make the setups clear, and to make certain that I`m following the rules. One of my problem is that I see a "nice setup" every time I turn on the computer. I want to quit this bullshit planless punting and start making some money!

I accept the fact that I really never know where the market is going, no matter how good reasons I manage to make up for it, so i stick a trailing stop loss on every trade, no matter what. I also acknowledge that I really don`t know where a move starts and where it stops, so will let the trailing stop loss take me out of the trade when the market goes against me.

Opinions are welcome, and I`m interested in both the fundamental and technical side of trading. I do not scalp, and I really don`t care a lot about the small timeframes.

I`d like to credit Wayne Jackson (Jacko) for inspiring me with his legendary Jacko's Forex House of Pleasure and Pain thread.

curious. one question

does jacko's anti hedge strategy works as alternative stop/loss method?

The AH is really something I`ve not been getting around to use very much. The positive thing about the AH, as I see it, is that it gets you in where you got out (wich cheaper than your initial position). The problem I see with the AH is the range we have been in latly. This goes for stocks aswell as EURUSD (wich is the only pair I trade).

I`m not sure I understand what you mean exactly anyway. I always use stop loss, but I do not always use the AH.

A/H
my understanding is trading a trend market (which assumes it's not always ranging)
and set a limit order to re-open the position when price recovers back to the previous s/l
this will not lose an oppotunity if your initial guess is right after some market noise.

This is an example of what I use to tell me the trend. The 50/100 SMA on the 4 hour chart. It´s really just a formality, because breaking lower lows and setting lower highs in a certain timeframe is all there is to it in my point of view. This indicator is not always right, and I really don`t care to much about that. In a range it`s hell, but when the market moves, it`s very nice! Jacko uses a "five year old", but I havent got any of those, so I use the SMA for now.

Like Jacko, I also use the daily and weekly chart, but I might just change opinions a littlebit more than him (making more trades and mistakes).

The same really goes for indices and oil. Determine wich way it`s going and has been going for some time, then get try to get a nice entry! If I fail, I let the stop loss bail me out, but I`ve been thiking of changing this strategy lately... I usually get the feeling when something is wrong, and if I exited at that time, instead of waiting for the stop loss, it would save me lots of money. I also have to work on getting the entries right. The best trades are the ones where it goes in my favour from the second I take the trade. I think this is where Jacko has his gigantic edge over other less disciplined traders. I really want this edge, and this is one of the reasons I`m starting this journal.

Yeah, that`s right. My point is that the use of AH requires some discretion, because it has limitations under certain conditions. If I`m fckd up in a range, and apply the AH, and then get Fckd up again, and again, Ill certainly get to the point where the market doesn`t reach my SL. Another way to do it is to time entries better, wich is what I`m planning to do now

I have two short positions in the septembercontract for Crude oil wich is running quite nicely. When it opened with a gap on moday, I considered that a nice confirmation on the direction. This is a trade that I`m proud of, and I want more of my trades to be well considered like this one.


The 50/100 SMA chart on the oil was reached on the July 1. so I waited patiently before entering.

The price has now been stopping up a little bit, so I moved the stop loss to just above the last high on the last 4 hour bar.

I also like to consider the fundamental aspect when taking trades. Atleast to make some story to make things a bit more interesting.

I consider Oil to be a temperature gauge on expectations for the growth in world economy. Speculators in oil have been buying large quantities, and some have even rented large tankers to store their oil while waiting on larger prices. The improvement of the economy has not been as fast as many people maybe expected, and the last rise and fall prices might be a picture of this. My hopes are that it`s getting expencive to rent tankers to store all this oil, and sooner or later it has to reach the market to prevent the owner going bankrupt. The owner of this oil might want to wait and see that the prices improve, but right now it`s plunging! If these speculators start to get margin calls....

Anyway. I`m short, and I want to keep this position until it closes itself.


Eur/USD analysis:



As you see this is hell for a trend trader, giving multiple signals. This range is so tight, that I do not consider it tradable right now. I`m biased short because of oil falling, but technically or fundamentally, I have no clue at all. I took two lousy trades in EU yesterday wich where fundamentally biased by oil correlation; - and this is something I really never want to do again. The next time, I will take more time to consider the Price action before entering... For now, I leave EU alone. I will wait until the large players are back form their holydays

I`m looking for a new short entry in Oil. The crude Oil inventories really didn`t affect the market more than a couple of minutes last week, even though the inventories had been falling more than expected.

As you can see in the oil chart above, my entries really suck.

This time, I want to get a bette rentry, and I will wait until the prices starts to fall again. No idea how long the price will climb like today, but I do expect the downtrend to resume after the retrace.

Will update once I see a setup. Looking and waiting for downward momentum for entering a short.

A high volume rally in Goldman Sachs triggered an entry at 149,8. Bad entry and I did not like the trade so I sold again with a small profit.

Waiting to see it brake 151,17 as a confirmation of the uptrend before considering another entry.

I`ve had a short term bearish view on crude lately, but I think I might change that view. The fall stopped at the 50% retracement of the last upmove. Are we heading up again? Will watch closely and see if it tests the 58ish level again. I might go long if it holds...

I bought the break out from the consolidation range. Will add longs if we break resistance at 62.20 on the septembercontract.

Update, SL at BE hit. Not willing to risk much on this. The thing that happens is that it rises right after... I`m in no rush, so I just start the waiting game again.

As I`ve said earlyer is that I`m trying to get better entries. The break out buy, was my first break out trade, and it was quite fun actually. Looking to see a break in Goldman later today wich I might want to buy. Update later. Hard to write while trading, but I`ll try to keep it up.

Bought Goldman on the opening rally. Nice clean break of previous local top made the decision easy. Now let`s see how it goes. Have not put a stop loss on yet, but I`ll not let this trade turn into a loss. The advantage of buying breakouts is starting to show itself to me. Starting the trade with instant profit is very good for your health

Hope this one departs 150ish for good now!

Watching strange PA in oil. Guess this is normal before inventories comes out.

Looking to see if it breaks resistance at 62,20 or not before entering either long or short. Give me a nice entry, and I`ll hold if it goes my way and get rid of it if it don`t Preserve capital and let the winners run like hell!



Edit:

No chance for a clean brake of 62,20 made me go short @ 61,79. This short is close to significant level at 62,20, so I will not sit through a retest of 62,20. SL at BE. D R O P ! ! !

Edit 2: Couldn`t brake low of the day and shot right back up so SL got me out at BE. Left a lot of money on the table, but I`m not in it for the small moves, so ... The trade was ok. Risked zero to win big.

September crude could not break low of the day at first try. Let`s see what happens in the key resistance area 62,20. A real fight going on right now. Lots of action...

Breaking new highs now is enough for me to be biased long in oil.

Lost the breakout, so now patience comes into play. Where will it find support now?

I`m a little wound up right now, cuz this might be the start of a new big upmove. I really want to catch a piece of it. Patience patience. Feel like entering right now, but I have to calm down first. No rush, the market will be there tomorrow aswell...

Looking for support before I might enter... or not...

Oil bounced off 63 now, and I hope it takes a plunge so I can enter. The upward force today was quite strong so I`m not sure it`s gonna fall very much before continuing, but I´ll leave it at that for now.

Nice trading day with better entries, and a rally in GS. Still holding GS, and will hold until it bends.

I also bought the Norwegian indice (OBX) this morning. Not to well planned trade actually, but this is in a nice profit aswell. This is loaded with oil companies, so I guess it`s gonna rally tomorrow.

Now I`ve got positions worth 1,5 times my account size. Looking to scale in if the entries on the OBX indice and stocks turn out to be ok. Before I used to start out with larger trades, and add smaller, but this time it`s different. Being in a trade makes me follow up the instrument much closer, and if the trade is wrong, the loss is small. Looking to add larger orders if I`m right.


Edit: Another long in finance (shame on me) Citigroup. The rally in C was on a huge volume, and the previous bottom was at a 50% retrace from the upmove that started in february. Even though this was the relief rally from citi not going bankrupt, it`s OK technically speaking. The high volume rally is an indicator wich seldom is wrong. Pick any chart, and count how many high volume rallies that end up turning around again... Anyway, the trade is quite small and I`m taking a risk on this...

Oil is now falling back a little bit. I see some support formed above 61 (for the septembercontract). The average retrace after a move like yesterdays, is between 1,50 and 2 USD, so we might see a bounce off 61,50. This would be a nice confirmation on the upward direction. Or it might continue down... I`m staying on the sidelines until I see confirmation of support and a break from support... I`m not sure it will go this low anyway, considering the strong break of 62,20 yesterday. Watch PA closely, and a reversal near support it`s time to buy.

The macro (yes I know, lagging) indicators have been coming in better, and a GDP growth in china at 7,9% is huge! We all saw what happened to the oilprice last time when optimism was peaking. The downside is limited, but the upside is unlimited...

Closing in on key level 1.4200. Will it bounce or pierce? I`m hoping for a pierce and EU resuming normal uptrend... Much easyer that way

Bouncing on 61,80 support, a level that served as resistance yesterday and on the 9th and 10th of July.



Looking for a break to the upside to get an entry into a move wich might resume the uptrend...

Broke 61,50, waiting to see if it takes on yesterdays low... or heads north again...

Real shitty day today. Lost some cash in oil because I made a mistake and pressed the trade button to early. Was trying to keep trading enabled, but ended up pressing buy instead. The result was lost concentration and missed opportunity. The market is there tomorrow, and I`m learning more and more. No trading tomorrow because I have to do some other job.

The trades I`m in are as follows: Goldman bought on the opening yesterday, in a nice profit. Broke 156 today, so I feel safe letting it ride.

Citi is quite shitty, bought late yesterday. Ugly loss wich I`m dealing with right now. The profit in GS outweighs the loss in Shiti, som I`m not to bothered to hold for a little longer and see tomorrow.

OBX indice is in profit, but the rally wich I expected didn`t occur. Will consider this one too in the morning.

All in all 1% up the last couple of days. Not very good, but I can`t beat myself up over it either.

Sold Citigroup @ 3,10. Bought at 3.17, a loss of 400 usd is not nice, but I did not like the situation at all. No use in holding on to a loser. On to the next trade.

Seems like stockmarkets around the world are very strong. Not yet a bull market, but still strong enough to be biased long.

Careful with shorts on EurUsd... EUR has been appreciating more under rising stockmarkets before, - ofcourse no guarantee that it will happen now...

Oil was up big today. Wait for a pullback to enter unless it seems to strong.