Consistency Plus Edge Equals Money In Crude Oil

Posted in: Futures Trading, Trading Article

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Regardless of how many posts you read in our trading tips section, the overriding theme is consistency.

  • Consistency with method
  • Consistency with trade plans
  • Consistency with risk and money management

It’s the consistency when trading an actual edge in the market that will lead to success over time.  It won’t be a straight line to success however an up sloping equity curve with the occasional valley is the reality.

If you believe in the power of numbers – and you should – you should be aware that you will have a string of losing trades that will drive your equity curve lower.

You can see that regardless of win rate, you have the potential of a losing streak that is going to test you.  It may even force you to move on to a different trading system which will severely hamper your chance of ever finding success in your trading.

Don’t do it.

Moving on to another trading strategy during a losing streak will have you miss the streak when your edge begins to deliver the winning trades.

 

Wednesday Consistency With Crude Oil

A great example of consistency is our trading of the crude oil inventory release that occurs on Wednesdays.  Like clockwork, we are consistent with our trade plan for this event and over time, our results have been something we and our Inner Circle group of traders, are very proud of.

The designer of the trading strategy we use to trade crude oil (Counter Punch Trader) actually calls it “license to print money”.  Of course T.J. is kidding but he says that because he can’t remember the last losing crude oil inventory release trade.

  • We wait 2 minutes after the inventory numbers are released
  • Our trading plan allows us to get “in sync” with a current trade depending on certain variables (learn in our free trade room trial)
  • We use a POQ (Power of Quitting) approach of one and done

Here is a live recording taken from the trading room that you can join at Netpicks and take the free trial.  There are a few things that you may want to pay attention to:

  1.  Even when the market starts to move (only slightly this session), watch how Troy brings up the clock and says we have to wait
  2.  During the trade, price starts to plot sideways and though it would be tempting to snatch small profits, the traders in the room sit on their hands
  3. Once the trade is complete (it’s a winning trade), you will hear “one and done” which means trading the reaction to the news, delayed by 2 minutes, is finished

Also note that we are taking this trade with a dynamic quick hit mindset. 

Using the trading strategy, we allow price to dictate the extent of our profit targets and stops which will change depending on the reaction to the crude oil numbers.  A bigger reaction will give us bigger targets.

The reason consistency to our approach is vital is many traders will not be satisfied with 13 ticks in this case, will be greedy, ignore the state of the market, and begin to over trade giving back their previous wins.

 

Live In The Markets Reality

Remember, we use a dynamic profit target approach which uses the current measurable volatility in the market.  Yes, we would all love large sweeping price moves but we trade in the markets universe and reality – not what we wish it was.

We trade in reality and let the volatility of the market dictate what we do.

I’ve read some comments when the trade profiles are smaller and people will complain that “it’s not enough” as if we or they can dictate to the market.  The truth is that the mentality of “it’s not enough” and then going for more when the market tips its hand to smaller price ranges, is a recipe for disaster.

Be consistent and don’t try to impose your will on the market.  You are going to lose every single time.

Free Trade Room Trial or Join Our Inner Circle

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CoachShane

Trader at Netpicks
Shane his trading journey in 2005, became a Netpicks customer in 2008 needing structure in his trading approach. His focus is on the technical side of trading filtering in a macro overview and credits a handful of traders that have heavily influenced his relaxed approach to trading. Shane started day trading Forex but has since transitioned to a swing/position focus in most markets including commodities and futures. This has allowed less time in front of the computer without an adverse affect on returns.

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