Still here

Its been a while (again!) since my last post. A lot has happened since then - my grand design of getting back even on my positions got hit pretty hard in May. At one point, I was down to $3000 in capital, and with a MTM loss of another $1000.

But now, things are way different.

On May 8, I sent the following email to a friend in India:

interesting set-up in crude. if it holds $61 on the weekly chart, that would confirm the ascending wedge. following the chart pattern forward, we could be looking at $80 crude in jan 08...!! if the pattern is confirmed, now would probably be a great time to go long - we wont see this level for a very long time ......

My call on $61 being the bottom was right! And this was after crude had fallen for 8 straight days. I took positions @ $62 and $62.15, before I realised that crude is indeed a very volatile beast. 2 days later, I was fighting to save both positions, as a sell off in stocks spilled over into commodities, and sent oil tumbling back to $61.

I then realised something interesting about oil - it has an inherent tendency to seek a double bottom before moving on. Also, at the beginning of the trading period, the price would drop about 30-40 cents, find support and move back up till it found the next support.

So, I thought, this means - theoretically, I can sell at the closing price, buy back when it double-bottoms and get more bang for my buck! Great theory - in practice, the double-bottom never happened that day, after I'd sold my positions - because Gasoline prices rallied to all-time highs, taking crude along with it. Of course, that was a link I wasn't aware off - and so I missed out on the ride to $66.

However, this week gasoline prices came down again, due to refineries in the US firing up production. Crude followed - and this time I was ready. Oil was trading @ $63 (having bounced off $62.50 the previous day) before the the oil inventory numbers on Thursday; a decline in crude stocks sent to price up to $64 initially, however since there was a build up in gasoline stocks, i expected the market to fall. And it did - all the way down to $62.50 - which confirmed both my double-bottom expectation and my chart. I piled in with 3 mini contracts, and plan to hold on to them for a while. Last traded @ $64.85 - and they are the reason why my account has completely turned around.

Just 2 weeks ago, I was in despair - all my positions were going down the tubes (in fact, I'm MTM -$1000 on my share CFDs). Since then, I've had a couple of profitable trades on the XJO and some pretty amazing ones in crude futures. I feel like I've crossed a major step in my learning.