Looking back over a period as long as a year may, to many traders, seem like a pointless exercise. One of the psychological traits needed if you are to trade regularly and stay sane is a poor, or at least selective, memory. Wrong calls and mistakes are inevitable. Dwelling on them only produces fear and trepidation, neither of which are conducive to making good decisions. However, I frequently stress the importance of setting and sticking to stop losses and if you have done that, looking back can be informative. It shows the importance of being disciplined in that regard and enables you to learn from both successes and failures. With that in mind, let’s look back at the last twelve months.
2018 has been a funny old year, but then in retrospect they all are, as markets, particularly commodity markets like oil futures, rarely move in one direction for long. When you look back, therefore, what stands out are the abrupt reversals such as we have seen since the beginning of October in crude. It is worth remembering though that that move was preceded by a long upward grind that started at levels very close to where oil is currently trading, as is clear on the 2-Year daily chart for the crude futures contract, CL below.
(Click to enlarge)
Of course, that doesn’t make it certain that 2019 will see a similar reversal, but it does make it more…