CL April crude oil

Click image for original size
short from 100.67, but covering quickly!
Originally posted by koolblue

short from 100.67, but covering quickly!

..will cover 100.50
50 SMA on 1 minute is 10053 now. they tend to defend 50 cent increment levels
Click image for original size
red avg and median line stopped it at 100.54.. had to cover at 100.74 for a small loss.. looking for a good long scalp
beginning to get a 'feel' for this thing loves to move in 18cent jumps.. buying 100.64
10104 hit. I tend to stop trading it during the last hour to hour and a half of pit trading. If it is going to go rogue it tends to do it then, especially the last pit half hour.
10106-10089 >>> 10078 initial and 10061 full
Click image for original size
LONG 100.78
On the "Here goes" thread it was mentioned how dangerous the CL is to trade and I couldn't agree more. With more risk comes potential for greater rewards but one has to stay alive by prudently and aggressively managing risk in order to live long enough to capture the reward.

Everything with the CL moves faster and farther than an instrument like the ES. The following is an example of what I mean from last week with the CLJ contract which was the front month then. This first chart shows a typical ascending wedge.

Click image for original size
ascending wedge clj1 3 17

Because the underlying trend of the market was up one could reasonably expect an up breakout. On top of that they "usual" ascending wedge continuation pattern is up and the following is what happened in the next eleven minutes after the above picture was taken:

Click image for original size
wedge breakout clj1 3 17

The extent of the berakout was way more than one would usually expect from an instrument like the ES or NQ as it moved 80 cents in 11 minutes. That is $800 per contract or the equivalent of 16 ES points. What compounded the situation was the breakout point was the round number of $101. When stop losses at $101 got hit for those who were short it got really nasty. Even shorts with stops at $101 likely got hurt more than they expected because the market is so thin and their stop market orders likely got very poor fills. Those with stop limit orders just above $101 likely did not get fills at all.

The point of this is to point out the volatility of the crude oil contract and the need to be well capitilized to trade it and to really protect one's capital.