The whirlwind of emotions of holding the Crude Oil Long entry

I finally closed my Crude Oil long today and made a nice 120+ points…. a good trade but it was also a fascinating experience for me with regards to my trading emotions.

I mentioned that it was a premature entry which I had made on the 25th October – exactly a week ago. I was overconfident due to a pretty good week trading and put on my crude oil long at 8600. I hadn’t waited for a confirmation for my entry so psychologically wise, I wasn’t best pleased with myself. However, I had committed and had my stop in place at 150 points below my entry (ie 8450). However, the following day, I was presented with a bullish pin bar and I felt that my trade was in the right direction.

However, it was also Friday when this happened so holding over a weekend isn’t always the best thing as you never know what may happen. Anyway, come Sunday evening when the markets opened again, the price started to fall… and fall again the following day on Monday which wasn’t good. The price actually fell through support (as marked in blue in the chart below).. however, it recovered and closed above… to me this is a false break and now potentially a quite bullish… I got excited again!

The 4 hour chart allows you to see the price action a bit more clearly:

The markets nevergo up in a straight line of course and I felt that the false break would cause all those short to go long to cover and push the prices up rather rapidly… The price did bounce up above 8500 quite rapidly back to 8600 – which was my starting point for the trade but then it seemed to fall again… I just felt that it should have had more momentum in the upswing so I feel a little worried here that there aren’t as many buyers as there should be after a false break of support.

Then a rapid rise a couple of days later bring up up to 8715 or so and as quickly as the market shoots up.. as quick as it falls back to 8600. So now, in my mind I am thinking to myself whether I should have got out at 8700 or so (big round number) for 100 points. The price dropping back down to 8600 means that I have lost profit and I’m back to where I started! Psychologically, I actually found this rather difficult to deal with… 100 points is a nice amount of profit but my target was actually 150 points which gave me a 1:1 trade… my lowest minimal effort.

I must admit that I did think to take profit at 8660 when the market went up again as it was profit and I think it would have been difficult to deal with if the market fell to 8600 again. However, the market did rise again and this time higher than the previous high of 8715. I actually had an alert set if the market went above 8690 so I was able to see what price was doing after it had hit this level. Price actually went as high at 8740, 10 points shy of my target and I took profits on the way down at 8723.

So I got 123 points in total. It was a bit of a rollercoaster of emotions with this trade for two reasons. Number 1 – the timeframe was a whole week and over a weekend – usually I hold a trade for a couple of days for a profit and Number 2, the market didn’t move strongly in my direction but was moving up and down like it was rangebound. All in all, it’s trades like these which test you as a trader and the feelings that you have when you trade these build your trading capacity with respect to trading psychology.

I still feel that I let myself down a little here as I wasn’t able to hold for the 1:1 trade completely.. ok, I’m 27 points short but still.. it’s not good discipline to break rules. I did initially think of holding out for 300 points which would mean a price target of 8900 – which I still believe is possible.

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