Actually, I will just add here the 4H chart.
It is very negative in all aspects…but look at those candle tails!!!
Someone is bottom picking here in a big way…maybe!!!
!
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Is this the High-5 method you are speaking of called, “Simple 5 ema low scalping strategy”
I am still getting acquainted with this site. I tried to attach the forum link, but the site does not allow new users to do so.
No, it is a long term trading method involving a selection of 5 or 6 different securities that have been identified as trending.
It was introduced here by Turbonero. Some people have been testing it but I haven’t seen any conclusive results coming back yet. The idea is that it always catches the big moves and these cover the relatively small losses that occur from time to time. But I do not trade a portfolio, only oil.
I have been tracking it with Crude Oil since early March and it has been pretty successful. So far 6 trades all lasting about 3-4 weeks and each made a profit. I am not intending trading it “as is” but I monitor it alongside my own method and whenever the two coincide in direction then I have greater confidence to sit with a position longer, but I don’t exclude trading against it when the signals and sentiment are good! 
You will find it here: Starting out trading and dont know how to make Profits?
Personally, I wouldn’t recommend using it solely with one security or commodity as there is a risk from large stoplosses early into each trade and periods when that particular product can whipsaw on a wide range. I don’t know if Turbo visits the site anymore but if you have any queries about it then you can post them there are maybe someone will answer ( I have that thread bookmarked too)
Ok, thanks. I’ll look into it as well.
Interesting news item to keep an eye on from the Wall St Journal:
The key issue nowadays is the OPEC/NOPEC attempt to reduce the high level of oil inventories globally and restore a sound floor to the price levels (somewhere above $50 barrel). They are trying to do this by cutting their own production levels by around 1.8 mill bpd. (1.2mill from OPEC members and 600,000 from Russia and other non-OPEC nations)
Both Libya and Nigeria OPEC members have (until now) been excluded from this agreement because of their internal conflicts and disruptions. But now both these countries are starting to significantly increase their own production to such a level that it is damaging the OPEC’s own reductions.
As a result, OPEC is now apparently considering trying to put a limit on how much oil members Nigeria and Libya can pump. Libya’s crude oil output has increased now to over one mill bpd and Nigeria’s output has increased to 1.6 mill bpd. Combined, these increased levels are significantly countering and thereby neutralising a large slice from the OPEC reductions - on top of the increased production from the US…
If OPEC does succeed in capping these two countries then this will boost prices. If they don’t then it may well encourage other OPEC countries to break out from the agreement and increase their own production. OPEC agreements are always somewhat fragile. Bear in mind that even the prospect of OPEC countries breaking the agreement is enough to move the market downwards…
Something to keep a eye on next week, maybe…?
Commitment to studying one’s commodity can go to great lengths…:
https://d.ibtimes.co.uk/en/full/1446561/crude-oil-bath.jpg
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I have very mixed views where we might be going from here. I have gone short based on my 4H/1H setup, but I am not very optimistic about the outcome (edited to add - I just changed my mind and closed out with a small loss - but I’ll leave the rest of the post here alone! That’s how messy things are right now!)
Price is below the cloud in both charts, the band is negative and RSI below 50. It is also below the 60 SMA in both TFs (as well as on the 15/5M). So, in theory, this is a good bear setup and technically no reason not to sell…but:
I am concerned about all those tails in the recent 4H candles. This definitely points to some buying at those lower levels and suggests any sell off could be very short-lived.
I think what spooks me the most about the downside right now is that when we had a decrease in US oil rig counts of only 2 rigs, just two Fridays back we had a good rally. But last Friday reported an increase of no less than 12 rigs - and the market has just shrugged it off. Now, I have learnt a long time ago that when the market does not respond how one would expect it to respond to certain data then it means the bulk of the market is probably looking in the other direction…
There is also talk about US stocks showing a heavy draw this week when the data is released, which also raises optimism beforehand.
It does seem, at least in recent history, that oil prices have found a base around these lower levels with the exception of the real collapse at the time of the oil price wars. But we are not in any price war now and maybe we should exclude those exceptional, excessively low price level periods, because the oil industry couldnt function then at those levels and it led to large bankcruptcies and cancelled exploratory and development projects - and that is not the environment we are currently in nor is anyone looking to achieve such an environment.
However, on the other side of the coin, I recently mentioned the Saudi Arabia huge IPO in which around 5% of ARAMCO will be sold off to large oil companies and investment institutions. The CEO of ARAMCO has been talking of how we are facing a severe shortage of oil in the future because of current reduced exploration investment and lower discoveries of new sources - does this sound a little like “talking up the market” prior to the sale? The higher the oil price the bigger the income from the IPO - and we are talking of a huge amount of money.
But in the broader picture one has to wonder, why does Saudi Arabia want to sell off 5% of its oil resouces in one go now at these low prices? Why not leave it in the ground until better times? OK, it is justified by a wise decision to raise money to diversify the country away from oil dependence, but does this not also suggest that their real long-term view is that oil prices are not going to get much better?
Added to that, there is an interesting development that now Abu Dhabi has announced plans to also issue an IPO selling off some of their oil industry.
OPEC has its next meeting on 24.7. and there are prospects that attempts will be made to bring both Libya and Nigeria into the production cuts agreement by capping their currently increasing production levels. They have previously both been excluded due to civil unrest within their countries. This is also bullish expectancy.
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good post manxx.
the issue lately is that the oil market is purely dominated by speculators since late. the rules of supply and demand do not apply to the oil price at the moment. therefore trading must be adjusted accordingly. you can see the last 6 months up and down how they formed so beatifully without many interference of bulls vs bears or bears vs bulls. once the speculators decide where they want the price to go, it will go that direction abd news/fundamentals are completely ignored.
applying a defensive trend following strategy and completely ignoring fundamentals/rumors/news is the best way to make good profits in this situation.
Hi Turbo! Good to hear from you again. I agree it has been a very tradable market from a TA viewpoint ever since I switched over to oil at the end of February.
I don’t trade on fundamental factors but I do find the oil industry so fascinating especially because it is such a great combination of national, corporate, geopolitical and technological factors and events.
But a real pleasure to hear a familiar and friendly voice again. 
This was a good example of a issue that I had wanted to start exploring on another thread about what a Trading method actually is and what it is actually telling you.
I had gone short in that red ring on the short term chart since everything technically was a “sell”. But something about those candles on the 4H was bothering me and they were trying to say something about what was happening with prices. In fact, even while I was writing the above quote yesterday I paused and went and closed out the position which was already a few pips in the red. I decided to wait for NY and see where they wanted to take this…
In fact, we did get another dip down that would have given a nice profit, but I was already out of that one. But then the hourly and 15m chart turned positive and we got a lovely move upwards with a beautiful pop at the end of the day- a move that one could now enter with even greater conviction because it was now in line with the message from those 4H candle tails:
This was the 4H “red warning light” from the tails that was tapping me on the shoulder and telling that there was significant buying coming in at these lower levels. We really have to be able to read what our technicals are telling us about price action and not just rely of a magic red line or a blue line or some mysterious indicator value without understanding what it is saying and even why you have included it in your chart - what are you really looking for from your chart components:
Here is the 15m chart showing the turn to the upside later in the day:
Here is one nice summary of the changes that have taken place in the US oil market especially since the price wars in 2015 and how they have led to the current strong position of the shale oil fields, like the Permian Basin, and its impact on global oil prices. Basically, it is saying that the shale oil companies can ramp up and shut down very fast in reaction to price changes, meaning that as oil prices rise so does production until it starts to drive those prices down again - until they reach low enough levels to cause the taps to be turned off, keeping prices within what it calls “soft bounds” - and there is enough oil here for this process to have global implications and not just a local impact.
This account from one oil and gas executive is included in a Federal Reserve Bank of Dallas report on the US energy sector and defines the overall effect of the shale boom:
The exploration and production industry needs to get used to the paradigm that oil prices will be set for the next several years by the breakeven prices needed to drill Permian basin shale wells. U.S. oil right now is all about the Permian basin—with highly productive multiple stacked layers of hydrocarbons, and wells not all that deep or overly expensive to drill, it’s more economic to drill and produce the Permian than almost any other oil play.
Shale operators have become hyper-cost conscious in the two years since the oil price crash sucked 50% of the value from a barrel of oil and too much debt started chewing through over-levered shale players like a runaway chainsaw. That’s when the accountants took the reins.
What was once the sacrosanct domain of fast-charging wildcatters came under the ever tightening leash of bow-tie-wearing CFOs. The driving force of U.S. unconventionals changed from “get the acres and drill it” to “find ways to drill and produce it cheaper.” Oil and gas companies and their capital funding sources care about what the breakeven price is.
The prior model of acquiring as many acres as possible at any price, contracting as many rigs as possible at any price and drilling as many wells as possible at any price—that model doesn’t work within the super-tight economics of today’s shale industry. And the accountants know it all too well.
Because 40% of all U.S. onshore rig count is presently in the Permian basin—operating rigs—and with each completion, the amount of production from the basin will increase. So the level of drilling activity will essentially set the Permian breakeven price, and the Permian breakeven price will set the level of drilling activity. When the price of oil exceeds their breakeven point (look at when oil broke into the $50-$55 range for about three months in early 2017), we had ‘drill baby drill’. When it fell down to the mid $40s and below, the accountants pulled back hard on the reins.
According to EnerCom Analytics, the average Midland basin well can return over 26% IRRs at $50/bbl oil, and will still yield around 19% IRRs at $40/bbl oil at the wellhead. However, overhead and other costs eat into these returns, decreasing profitability. While Permian players might be able to make some money at $40/bbl oil, returns are generally not high enough to ramp up activity.
In this way, Permian wells can provide some “soft bounds” for oil prices. High oil prices over a significant time will drive Permian producers to ramp up drilling activity, thereby increasing U.S. production. Sustained lower prices will result in decreased activity, slowing U.S. production.
The Permian certainly has enough oil reserves to influence global prices. In late November 2016, USGS estimated that the Wolfcamp shale in the Midland basin alone held 20 billion barrels of oil. This estimate of technically recoverable resources encompasses only one formation in only part of the Permian, meaning there is significantly more oil out there for producers to access.
Hey im sorry to dump your great thread!
I would really like to trade oil but i dont really further. Can you explain your strategy a bit? or have i overread where you explained it?
Thanks for the great work!
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Great read! Answered several questions I had.
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Thanks VictorS.
This thread is very much a learning curve for me too. If I read something that helps me along my road to understanding the oil industry and trading it then I put it here. Feel free to do the same if you wish!
Thank you, Troparzum,
No, you haven’t missed any explanation of my strategy here because I have never posted it.
As I said (warned? ) in the OP, commodities/oil trading is a brand-new direction for me, too since my background is from forex and interest rates.
This thread is not intended to be one of those where someone presents a strategy/method and gathers a crowd of followers. I am not here for that kind of thing. My aim and hope here is simply to create a place of joint learning and development concerning trading Crude Oil. As one prominent forex expert on this site has recently pointed out, I am still at the infancy stage and still sucking on dummies. I rather like that! I often feel that the best mental approach to trading, no matter how long one has been trading, is as a humble, ignorant child. And that is certainly how I approach this market!
I do post my charts here but only in order to visually illustrate what I am writing about at the time. I cannot present it here as a strategy anyway because my trading is deliberately very discretionary. I choose my chart “tools” with great care and each with a specific, identified purpose, and I do my best to practice with them and develop my skills in using them. But as any craftsman will confirm, things still go wrong at times and behind every final piece there is trash can for the ones that didn’t turn out right - its a bit like that with every trade.
My approach is to study as much as possible the commentaries about the factors currently influencing the market but to only trade according to my technical assessment of what price is actually doing. I also decide whether I am trading off the 4H chart or the 15m or even the Daily. I continually skip through all these TFs and choose which is the best suited for a trade. For this reason I cannot describe any kind of “strategy” because it is so fluid and can even change in an instance.I don’t claim this is the “right” approach but it is my approach.
If you are new to this then I suggest you start trying some approaches in Demo mode and develop what suits your circumstances. If you wish to share some thoughts and ideas here about oil trading and charting then please do - that is certainly welcome here!
If you are starting out with Crude Oil then I suggest you start with CFD’s rather than futures because the smallest futures position is very large. With CFD’s it is possible to open even quite small positions if you are new to how the market can move. The downside is that CFD’s have a spread of even 5-6 pips which makes short-term trading on, say, 5-15min TFs very inefficient.
Let us know how you are getting on!
Thank you very much and i understand that you dont post your strategy. So I will developed my own.
JeA its the beginning of a new Journey for me before i trade forex as well, But I like the oil market and want to trade it with Nat Gas or so😂
I will learn what I musst know to trade it successfully and you thread is a good first step imo
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I would be really very interested to hear how you are getting on and how you are developing your own approach.
I use mainly MA’s, always have, always will. But many don’t and there are many different approaches to achieve the same result - consistent profitability. Which means we are all on the same side here and helping one another can only be of mutual overall benefit.
One qualification regarding my previous post:
When I said, "My approach is to study as much as possible the commentaries about the factors currently influencing the market but to only trade according to my technical assessment of what price is actually doing." It is worth remembering that the commentaries themselves are already “2nd hand” and therefore what I post here is already “3rd hand” information. However, the underlying trends, influences, situations, etc do not change that quickly - it just means that these issues are, by definition, pretty much already well-accounted for in the price at that time. Hence the need to rely on the technical assessment to verify, or otherwise, a particular price direction.
I trade forex now for 4 years but now it feels that I have to specialize in one market and oil has a great volatility. The sharp Trends a very nice for daytrading imo. I think to specialize in one market makes the anlyse much easier not 10 pairs anymore that are moving complete different.
First i will watch the chart what strategy and timeframe, range renko or tick charts make Sense in my eyes . Than risk Management. News are a much bigger Part in oil trading than forex, i think so. I have to learn how understand them well 
Ma’s a great to define a trend but I find them a bit to laggy.
For now I will only watching how the price is moving the days. I hope that gives a pictur how this beast is moving.
P.s.
When I daytrading o only trade the prime time of the Day. Thats perfect for me 14.30 to 16.30 in my time zone.
If its okay I would post my Evolution in your thread😊
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[quote=“troparzum, post:279, topic:83773”]
I trade forex now for 4 years but now it feels that I have to specialize in one market and oil has a great volatility. The sharp Trends a very nice for daytrading imo. [/quote]
I have also found that Oil trades technically very well. And when it decides to move then it moves a good distance. Compared with forex, it does seem sometimes to be a bit sluggish before it actually starts to move, but i think it only goes to show there is perhaps a different category of participant in the oil market.
[quote=“troparzum, post:279, topic:83773”]
First i will watch the chart what strategy and timeframe, range renko or tick charts make Sense in my eyes . Than risk Management. News are a much bigger Part in oil trading than forex, i think so. I have to learn how understand them well [/quote]
Sounds good. I also think news is very relevant in oil, but it is also so very interesting just as a way of following what is going on in the world outside just currency-driving issues.
[quote=“troparzum, post:279, topic:83773”]
Ma’s a great to define a trend but I find them a bit to laggy.[/quote]
Yes they are a lagging indicator. But that is their very purpose - to compare where we were to where we are now and to indicate whether the change is significant or not. Like all indicators/methods that people use, they all have their own purpose - it is just a case of finding and utilising those that suit one’s situation and objectives best.
“lagging” is an interesting concept. For example, even a single candle on any timeframe is, in its structure, built on the same type of “lagging” as in MA’s. It compares the relative change between open and close and the range achieved from high to low over that period. Similarly, fundamental data releases such as NFP are lagging in that it reports on the previous month and even contains revisions to the period before that.
[quote=“troparzum, post:279, topic:83773”]
When I daytrading o only trade the prime time of the Day. Thats perfect for me 14.30 to 16.30 in my time zone.[/quote]
I have to agree with you there! I did start by trading both London and NY, but I have now gradually been shifting to only actually trading the NY timezone. There is enough movement there for my purposes and the earlier London session gives a good background to compare NY direction with. Whereas London is a follow-on to an Asian session, which tends to be quite directionless…
Please do!
I think a good thread is one where everyone’s contribution triggers positive and constructive thoughts and ideas in others - as we are doing right here!
Whilst I am looking at oil here, I have to say I am quite pleased how the same approach seems to suit currencies as well. As a native Brit living in the Euro world, I do keep one eye on EURGBP. I had actually intended focusing on this full-time after Brexit as I felt the potential for moves was going to develop strongly as these two currencies go their own ways.
Although this was true, I found the whole EU v. UK scenario too negative to follow. My overriding requirement is that trading must be fun, enjoyable and rewarding in both financial and personal interest. So I chose oil instead.
But while waiting for the afternoon oil market there was a nice setup on EURGBP and I couldn’t resist it: 
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Some reports concerning the weakness both yesterday and earlier today were pointing at signs of weakening compliance with the agree production cuts amongst some of OPEC members. Compliance in June had slipped to 78% from the 95% level in May. Excessive production was reported from Algeria, Ecuador, Gabon, Iraq, UAE and Venezuela. These are in addition to the significant increases from both Libya and Nigeria, neither of which are part of the agreement anyway,
On the other hand, there were signs of increasing demand for oil, significantly from China as well where data for the first 6 miths of this year show CHina to be the world’s biggest importer of oil,
But, overall, global inventories are still apparently some 266 mill barrels above the 5-year average which, according to OPEC, needs to be cleared before a balance in the oil supply/demand can be achieved.
So we can see pressures in both directions on oil prices and it is not surprising that it is very choppy right now. (I am not trading it today, I have no clear direction as charts are in neutral territory). Sometimes, knowing when to walk away is far more profitable than trying to pre-empt what the charts might say next!
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