Crude Mess

I was really looking forward to trading on Jan 4.

So much so that I've not been able to sleep since Saturday.

I'm not kidding.

Came Jan 4 and I could barely keep my eyes open. Took a nap and got up at the open of the Europe session.

I've been shorting crude oil near 80 since Thurs (last trading day of the year) and getting stopped at breakeven each time. And finally when I gave up, it plunged 50 cents at the final hours. That was 10 minutes after I scratched my trade.

Anyway, I opened my chart yesterday at 2am ET and saw that crude was crawling up again. Didn't matter that it was trading above pivot and above MA and had made no swing lows, and didn't matter that my reading told me that I should totally go LONG - "it just can't keep going higher" was all that was on my mind.

Breaking 80 must have really exhausted the bulls I thought and I shorted it exactly where I would have gone long in the past, and then shorted it again when it made a high for the 2nd time.

My stop was fairly tight (I knew I was trading against trend) and I was stopped out for 100 in total.

3rd stop went totally wrong. I was stopped out for 6 ticks more than what I had set.

Didn't lose my cool though. When price hit R3 and took a pause there, I decided that crude can most definitely keep going higher. So I went long on a "inverted scallop" or Al Brook's "double bottom bull flag" pattern (also what Long and Wrong called "buy an uptrend cheaply to maximize profit, and minimize cost should I be wrong"), aiming for target at R4.

I scratched my long after some really fierce bear bars threatened to take out my stop.

As fate would have it, price didn't get anywhere near my stop, and continued soaring towards R4 instead.

But by then I was already in another short.

When price broke R4, I covered. Well I thought I did. I realized seconds later that I had entered another short instead. Just as price was shooting up. Lovely.

Since that would have been the 4th time that price was making a new high, and R4 has almost been the furthest that crude would go, I decided to just sit and see what happened.

Sure enough, price came tumbling down after making its newest high. So I was effectively averaging down. Got out at a USD 200 loss when price couldn't go any lower, it seemed. That was surely better than the - USD 1000 I was looking at before.

I'm just thrilled. A brand new year and I've started to do things I've never done before - fading the highs on a wildly bullish day and averaging down.

As I said, PnL to be posted at end of each month.

Here's the mess: