Oil prices – They say every trader experiences trader tuition – this was that day! | Results after 55 Crude Oil Trades and Revisions
They say every day trader experiences a trader tuition that they to pay to the market. Well guess what? Tuition fees came due this week. On Wednesday, I got smoked out of the market because of oil prices. It was my worst trade to date.
UWTI gapped right through my stop limit, teaching me a valuable lesson in the process.
The last 3 days I’ve traded, in fact, have been brutal. I’ve now been trading for nearly 2 months. Just as I was starting to feel like I had somewhat of a skill for this, I got crushed.
Oil Prices broke my winning streak
I had been on a roll of six winning trades prior to April 22nd.
I was starting to get a bit too comfortable in the markets and placed 5 trades in a single session on April, 22, 2016. The most ever aside from paper trading. And this is the key date where the bad trading started. Maybe I was becoming a little too smug about the profits backing me up. I had been doing a good job of limiting losses all month and had built up a decent profit in the process. Somehow down the line though, I forgot to secure those profits.
Worst Trade Ever
Which brings me to Wednesday, the worst trade to date. The plan was to trade UWTI because that’s where the volume was early on. There also appeared to be some level of resistance on the crude oil candle sticks. So I worked out the amount of shares I intended to buy. I decided on my stop limit and made a general plan to buy before 10:30 AM, thinking that oil would spike after hearing news reports, which were also betting on bullish supply data results.
But trading is about probability and the results don’t always go as planned…
My stop had been set to just below the low of the day(29.72) at 29.65 limit, 29.68 stop price. But at 10:30 AM, when the WTI inventory data was released, oil gapped down massively. Right through my stop. I quickly reacted and reset my stop and ended up eventually getting taken out. My largest loss to date in one trade.
It was strange to me because the reports seemed good, the technicals seemed good, the inventory numbers were good, yet oil decided had a different outcome. I’ve also made similar trades to this one before that ended up being successful.
However, tuition costs came due and I paid up. I’m still up over what I made in March but I’m a little cheesed I forfeited a chunk of the profits I’ve worked for over the month. I guess these are the struggles of a first time trader.
Related post: 9 Qualities of a Prosper Trader
Results
36/55 = 65.45%
Total success rate of 65.45% winning trades. 36 trades made money, 19 lost money.
Last reports results
69.23%
9/16 = 56.25% since April 18th (last report)
Down (3.78%) since last report
The month of April has been a trading success over March for sure. Some of the concepts I mentioned in the Trades Revisions post have been working very successfully. These last 3 trading sessions in particular have taught me that I still have much to learn.
The main note to take is that this is possible!
It’s not a loss that will break me or I’m going to be forced back to to day job, but it’s a reminder to manage profits more wisely. On the bright side, I’ve got all this time to myself to spend while it’s the summer. I spend the sunny weather with the patio door open, breeze flowing in, while I get better. It’s paramount to make the following revisions in order to improve.
Problems are not stop signs, they are guidelines. Robert H. Schuller
Revisions
- Entry Price = low price + stop limit or max loss for the trade.
- Always wait until after the news report.
- Utilize volume, but don’t bet on volume alone.
- Manage risk better – Be aware of profit gains and how much you will risk.
- Don’t stray from the strategy.
- Follow the crude oil charts, not so much if oil is flat, up, or down.
- It’s ok not to trade when the setup is unclear.
- Take profits. $1.00 is better than a loss.
- Move up stop limits on quick risers, they can make your week.
Along with the above bullet points, I need to execute and carry the right mindset everyday. Here is a really helpful video on how winning traders should think.
Oil Prices leads to Disaster – Final Thoughts
I had a really great month for trading despite the last week of April, but losing is unfortunately part of the game. After April 22nd I made some key mistakes that I am still pondering on why I was willing to put myself in those positions.
Overall though, when comparing trading in April to March, I’ve improved a lot. I have shown that trading it’s a conceivable way to make a living. But the fine tuning and pressure begins now.
I have to strictly follow the revisions for May and am planning to elaborate in more detail on them. I must follow the strategy thats been proven to work. May is going to be much more about structure in the office and securing profits.
I am not a licensed investment or tax adviser. All opinions are my own. This post contains advertisements by Google Adsense. This post also contains internal links, affiliate links, links to external sites, and links to RTC social media accounts.
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