4.28.20 This is the third video this morning on oil. This is about presses... which are higher tops and bottoms with a minimum of three bars. Because it set up correctly, it was easier to show you the dynamics. I talked about potential scalping techniques that might help you realize more profit potential that might not otherwise occur to you. There is always a risk which is inherent to scalping because of risk: reward issues. Still, it is worth listening to because it is not an intuitive way to trade in real time for many traders who are one-sided thinkers: they think the market is either going up, or does going down when it's not nearly that simple. The other two videos today are much more important regarding oil. In this video I showed my perspective on how presses often include the body of the previous bar, when you listen to the video you'll understand my reference. But what I did not say is that if there is another bar pressing higher tomorrow, the market may retest a good portion of today's bar, and if you are a one-sided thinker, this is not going to be a comfortable experience. My recommendation is to look at and observe it, and see if it's something you can use that is compatible with your requirements as a trader, but don't trade it until you get a feel for this because it might not work for you, and the fact is it doesn't work all the time anyway, and it requires some discretionary real-time analysis; and most importantly...what you have done effects what you are able to do, and what this means is if you're holding a contract at a higher price and your unrealized position in this market reflects that you're already down $1500, you may not want to add a contract because you think the markets going higher, but if it doesn't you are now losing on two contracts. Just watch the relationship and don't trade until you get familiarity and you're comfortable with this type of analysis.
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I made a mistake that I caught after I posted. I never take trades that I'm willing to risk three points to make one point. I sent it backwards. I want to take a trade that a risk one point to make three points. Sorry about that.
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There is one other point that I'm trying to make and I'm afraid I obscured my point too much talking, and that is I always think like a buyer and a seller before I take a trade. When markets trade to resistance, I realize that this can attract sellers. However, sellers can be wrong even though they may have a brief moment of success. And if they get out before they get burned, then I guess they were right. I would not have sold at the retest of the breakout lower because I was a buyer at a lower price and thought the market was going higher because structure was in my favor. Yet it went lower and I would have lost money. But when the market found its bottom and started pressing higher, the dynamics change for me because the market was giving me new information. When the market found a new top on a press of three bars moving higher, and it started to reverse at resistance, my belief was that the market was only going to have a relatively minor correction lower before it would find buyers>>> the press was the dominant behavior for me, not the reversal at resistance. And yet it is very tempting to look at the market and think that the market must go lower at the resistance level, especially when it corrected nearly $2000 on a large contract.
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ONE OTHER VERY IMPORTANT POINT: I think it is very difficult to be both a good scalper and a good swing trader. It is to me. I find it very stressful to scalp, and I know that I won't have the risk: reward that gives me the edge. Scalping can easily result in over trading. I don't think I have an addictive personality other than for ice cream, and most forms of bread. However, I have experience very difficult times when I was impulsively trading, and it tended to be very short-term trades. We are what we are. if you want to be a good scalper, I can only guess that you need to know when to stop. When I buy ice cream, my husky and I would wipe out 1/2 a gallon before the night was over. You do not want to trade as a scalper lacking discipline and some level of constraint.