Crude Oil and oil markets

One question do you use Pivots? In a little backtest it seems that the oil market like them a lot :smiley:

For now the strategy based of Support and Resistance levels from Weekly to Daily and Pivot Points.
Trading timeframe is from m5 to m30 but i dont know how tick bars, Renko or range bars working in oil.

I test some indicators i think a momentum indi could really help. I will try Ma’s as well.

Can you talk about your risk management? I try to get a risk reward of 1/2 and a hitrate of about 60-70% lets see how i will realize that :blush:

Like you said i trade the CFD and i have a spread of 0,4 Points thats good imo but i dont have any other experience.

I think to look for the USD is a good choice while trading oil or is this not really helpfull?

Okay a bit work done, alot to go! Have a nice evening!

1 Like

I only place the daily Pivot line on all my charts but not any of the other levels associated with the Pivot, such as Classic, Camarilla, Fibonnacci etc. The only purpose that I use the core daily Pivot line for is to determine whether price is currently moving towards or away from the previous day’s weighted average level i.e. the Pivot line.

I interpret this as follows: If the price is moving inwards towards the Pivot then it is directionless relative to the previous day and tends to be a bit choppy and erratic. But if it is moving away from the Pivot then it suggests price is either continuing the trend or retracing/reversing it, and the action is often smoother and stronger/longer lasting. I cannot comment on the effectiveness of the other pivot lines, but I would not be surprised that they often work as the oil market does seem to respect technical levels quite well.

That sounds very reasonable. So far I have tended to prefer trading the 1Hour and 15 min TFs. I know nothing about tick bars, etc.

If you use MA’s, I suggest you do not try using a crossover method for entry AND exit. These only tend to work in good trending markets and whip like crazy in ranging markets. I think they are useful for identfying entry starts and confirming trend continuations, but maybe something else is better for the exit decisions (always the hardest bit!). But I guess you are already aware of this as you have been trading forex already for some years!

I do use a kind of momentum line but I don’t usually show it on the charts I post here because it is irrelevant and clutters up the chart. It is not reliable on its own as a trading method but does give a good indication when a move is running out of steam - here is a 1H chart showing just this line without anything else, I think you can see that when the candles move below the ribbon then it is running out of energy . And when the ribbon actually crosses back, often it is a sign that the market is reversing:

Hmmmm, this is a difficult one! I have been trading for so many years that I don’t really calculate this very mechanically any more. I just put on the size position that intuitively fits my assessment of the trade “quality”. For example, that EURGBP that I mentioned earlier was such a strong signal with a good feel about it that I put on a big size and just looked for it to run down to at least the previous low. In other words, it was a fixed target trade. In other circumstances, or overnight, I will put on a half size or even smaller or scale out.

I guess most of my trades with oil are tending to be nominally 50/50, looking for around 50 pips target and a 45+spread 5 stop. But I always trim both targets and stops to nearby highs/lows, S/Rs, psychological numbers etc. But I also tend to monitor my trades and close out whenever it seems appropriate (e.g. if it just falls short of my target and looks like falling back then I take what I can get), I don’t recall that I have ever yet actually had a 50 pip stoploss because I always close out if I get a reverse trade signal (e.g. from a 15m chart) or more often, a crossover in that momentum ribbon - and that tends to usually happen before it has dropped so far as 50 pips. But, as I said, earlier, I trade on a discretionary basis and it is hard to generalise what my actual ratios are!

On the other hand, I do monitor my overall ongoing P/L very closely and I do as a rule keep my individual trade risks in proportion to my overall profitability. I do not trade for a living, my only interest is capital building and a few “treats along the way” :slight_smile: . I think R/R is a much bigger issue if one tries to earn a living from forex. I wouldn’t want to have to trade under that kind of pressure!

My success rate has been surprisingly high so far, around 80%, I guess (much better than when I traded forex!). But I am an extremely cautious trader. For example, today, I have done four trades and all of them fairly brief but all of them in profit -but none of them anywhere near 50 pips!!! :smiley:

I also think that is good. My spreads are 5 pips, but I have seen 6 (I think it was Tickmill) and also 2-3 (which I think was maybe Oanda?)

Do mean for correlation? I have read that there is a loose correlation between USD movements and oil prices since oil is almost always priced in USD which in theory affects the price that buyers pay in their own currencies and therefore how much oil they can buy for the same amount of domestic currency. But I have not noticed any close correlation on such short timeframes that we trade. Maybe on a monthly basis? I don’t really know, I haven’t studied that.

But I have noticed that for example the USD reactions to NFP releases do not impact anywhere near as much on the oil price. So if there is a correlation, I think it might be too loose to be of any serious use as a predictor of oil price movements.

Sounds like you are moving fast! I like your enthusiasm! :smiley:
Nice evening to you, too!

Wow thanks thats alot to think about and most about the money Management. A hitrate of 80% with a good risk Management would be a Dream!

Yea ma crossover are not in my trading Portfolio anymore :grin: but I like Ma’s for pullbacks.

Yea I also mean normal daily pivots and thanks for the mind opening Part i really have to think about that.

USD Correlation i read it all over the place but if it doesnt matter its okay for me😂

And youR right a momentum indi Clusters the chsrt alot and doesnt give really new Information.

I think over the weekend i will get the strategy ready for a forward test.

Have a nice day and keep up the good work!

[quote=“troparzum, post:285, topic:83773”]
And youR right a momentum indi Clusters the chsrt alot and doesnt give really new Information. [/quote]
I didn’t actually mean that it doesn’t give much new information. I only meant that it clutters up the overall view when there is too much on one chart.

I am actually finding that ribbon very useful. My main problem is that I do not stay in trades long enough and I am missing an unacceptably large amount of some moves. This is a kind of throwback to my previous forex trading style when i was used to fast and quick moves. But it often seems that, whilst oil sure can move fast,it can also continue the same move for ages - and long after I have taken my slice. So I am using this momentum ribbon to help train myself to have the patience to stay in trades longer…as long as this doesn’t start to seriously damage my success rate! Trading is always a series of compromises! :smiley:

Sounds good! - you too. :slight_smile:

Today the Pivot worked great for me 60 Points for me on demo :smiley: Not a trade to be proud of but hey.

New step Rsi with standart configs for Divergence. Have you tested Fibo retracements?

EMa 50 and 200 on all charts. I write in an excel sheet where the EMas are standing on weekly to daily because they dont move every hour or so and i dont want to clutter the low timeframe charts with too many lines.

Next step I think about Volume but with CFD´s its not so helpfull imo.

What emas do you use for the Ribbon? i want to try this :wink:

So for now I have Support resistance, Pivots a Rsi and The emas. I think most of this can be deleted over time but we will see what is really helpfull and what not. What dou you think about this?

Have a nice day;)

Hi Troparzum,

I see you have an avatar now. Nice one!

Sorry I haven’t replied earlier, we’ve been visiting old friends all day…and looking at the oil charts tonight, I have a deep suspicion that I might have saved a lot of money by not being at the PC today! What a mess it is!!! :smiley:

Congratulations on your winning trade! Don’t underestimate it - every trade like that is one to be proud of!

Actually, I would say that any trade that is made in accordance with one’s rules is a good trade and one to be proud of, whether it is profitable or not. We all accept that there are wins and losses, it is that kind of business. The only bad trade is one that is done against one’s rule set! :slight_smile:

I have just got home so I’ll think about your other points tomorrow. My first question is are these indicators ones that you have used in forex previously? Secondly, what are your reasons for selecting 50 and 200 periods, why ema and what are you going to do with them? Just checking out your thought processes here and making you work a bit! :smiley:

Will write more tomorrow, see you them! :slight_smile:

Hey and good morning😁
No Problem that you write so late😋
Friends and family is the important thing in live

The trade was without rules i only looked for a Pivot retracemant. but it worked perfektly.

Jea the emas. . In the past and in forex they act as a strong resistance so I would do the same with them in oil. But I think I got lost in the search for more confluence.

A Rubber Band would be more helpfull i think.

The indicators i used in forex. i used support resistance and pivots in forex. Sometimes Fibos. Nothing more i was a bit over motivated and what to build a strategy with as much confirmation as possible. But simple Wins in my book. I have to think about what you said and maybe I have to restart.

Interesting headline news…what??? market rises under downward pressure??? No wonder making profits is hard work in this industry!!! :slight_smile:

OIL POSTS SOLID GAINS DESPITE DOWNWARD PRESSURE

This is the heading on an e-mail that arrived yesterday. I think that just about describes the duelling pressures and uncertainty that seems to be ripping the market up and down at the moment.

We are all so aware of the talk in the bear-corner about crumbling OPEC agreement, the rising Libyan and Nigerian output, and the ongoing surge in US shale oil and other areas. Or as another headline put it: “The oil market rebalancing hasn’t even started yet”.

And yet, on the other hand, in the bull-corner we have talk about increasing signs of growing demand in various economies and capping Libyan and Nigerian output. And we also now have some curious rumours that although the US shale oil supply is surging rapidly, the companies’ profits are not! - at least not at these price levels, and that energy sector investments are not doing so well and even future funding may not be quite so readily available.

So we have the ups - and we have the downs… and it seems on Friday afternoon we saw plenty of both:

Should we maybe conclude from this that Crude Oil is one to stay clear of for a while? Or at least, just to play on the short term only charts for now?

Hi Troparzum!

These would appear to be a sensible choice if only because they are very commonly used. At least they seem to turn up frequently amongst people who share the details of the trading methods. And, of course, when a technical indicator is used widely then it tends to focus and concentrate trades around that level. However, that is only a technically driven support/resistance and not necessarily reflecting the actual actions of the underlying commercial interests dealing in the actual currencies or commodities. It is useful always to remember that us retail traders are not actually buying or selling anything other than a betting ticket concerning the change in price.

When we have a trend then it means by definition that there is ongoing actual buying or selling over a continuing time span. And the underlying interests that are doing the real buying and selling are looking for value in pullbacks and retracements. It is the speculative segment in trading that tends to fine tune and concentrate these interests towards specific and defined levels (or regions). But once the underlying interest ceases or reverses then the technical levels in the form of horizontal S/R lines or, for example, ma’s mean nothing.

Generally, speaking I would prefer to think of ma’s as a tool that smooths recent price movement in order to identify if it is rising or falling relative to its recent historical levels. And using multiple ma’s can also give some indication of the rate of change, i.e. whether it is accelerating or stalling.

The issue comes in choosing which values respond quickly enough without giving too many fake signals! 20, 50, 200 are all typically popular periods and are worth considering since, by definition, many others will be acting on them too thus providing a least a degree of self-fulfillment! :smile: But worth remembering that, for example, a 50 ema on a 1 hour chart is roughly approximate to a 200 ema on a 15min chart. So the number of periods for a given line is a function of the time frames being used.

The same approach goes with fib retracements. If enough conmmercial interests and traders are looking to enter or build a position and enough of them watch fib retracements then they will work since they will be the hub levels where all these interests will congregate. But I do not believe that there is any intrinsic magical or natural law concerning fibonacci ratios that directly causes prices to stop at these numbers! Afterall, we can apply fib retracements to different high/lows on every and any timeframe we choose to use - and these TFs are only arbitrary segmentations of a continual price flow for the purpose of analysis.

Sorry for delay, Troparzum, I’ve got a few delays with some boat repair problems this weekend,

Not quite this:

…in my wildest dreams maybe, or maybe not actually! :smiley:

Just some problems patching a hole with glass fibre filler in a little rowing boat. Will catch up with your other comments.

[quote=“troparzum, post:287, topic:83773”]
New step Rsi with standart configs for Divergence. Have you tested Fibo retracements?

EMa 50 and 200 on all charts. I write in an excel sheet where the EMas are standing on weekly to daily because they dont move every hour or so and i dont want to clutter the low timeframe charts with too many lines.

Next step I think about Volume but with CFD´s its not so helpfull imo.

What emas do you use for the Ribbon? i want to try this :wink:

So for now I have Support resistance, Pivots a Rsi and The emas. I think most of this can be deleted over time but we will see what is really helpfull and what not. What dou you think about this?

But simple Wins in my book. [/quote]

We have talked about EMA’s and the daily Pivot already.

I do also keep an RSI with14 periods based on typical/median prices rather than closes, I find it a bit smoother but otherwise no great difference. But I only glance at it as a form of addition confirmation when to enter, or that a move may have started. I only watch crosses over the 50 middle line, I don’t have any interest in the usual 30/70 lines. What about you?

I have never monitored volume so far in any trading, but if and when I move over to futures for oil then it may be worth looking at.

The ribbon I showed is not based on EMA’s or any other usual form of moving average. It is based on regression analysis and plots the moving average of the end-points of a linear regression of the specified number of periods. Its main purpose for me is solely to indicate when recent price action is running out of steam and that a change in direction may be imminent. Trouble is it clutters up a chart so I keep it separate - as you say, simple wins! :slight_smile:

Very little new to mention here so far. We are still capped at the same levels we saw last Friday and are drifting sideways.

Most news seems to be either bearish on oil or at least suggesting only limited potential on the upside.

The technical position is also reflecting the same hesitation but the bias is still upwards from here. We had a technical poke down to the daily pivot and bounced off that but no follow-through as yet above that capping level shown in the red box on this hourly chart:

In the meantime, the EURUSD is looking more likely to give an upside trade so I might go long there instead for the day…let’s see…

If there is fresh oil comments later then I’ll think again, but right now the long term view seems still range bound and straight with a few deviations up and down.

The Pivot line seems to be the flavour today…:

Well we didn’t manage to break that capping yesterday in spite of the bounces off the pivot line. And in the end we broke through the pivot line and started a rather slow and lacklustre drift down. Enough for a trade but not especially rewarding! It may see some more follow-through today but the motivation so far is quite weak. I was more inspired by the EURUSD yesterday and couldn’t resist a buy there - old habits die hard! :slight_smile:

There is little new news to prompt any change of heart and I am wondering whether we are drifting into a summer doldrums - or is this just the calm before a major move. I don’t think oil ever actually goes to sleep - it just rests in wait for its prey.

But in the light of a lack of anything worthwhile to add here I am also going to take a back seat here and spend some time on enjoying the summer before it all slips past! :slight_smile: I’ll post here anything that is of significance, otherwise it is off to the nature with that repaired rowing boat…:slight_smile:

Hey I hope you have a nice day.

After some time and a bit later than I thought i have took an old strategy of mine. But I will trade more than oil to get at least 2 trades a day. Later i will Post what it is about and i would really love if you can rate it.
What do you mean with 30/70 lines?

A boat like this in the picture would kill so much money
Nice viewed around your home! I hope your not sunked

[quote=“troparzum, post:297, topic:83773, full:true”]
After some time and a bit later than I thought i have took an old strategy of mine. But I will trade more than oil to get at least 2 trades a day. Later i will Post what it is about and i would really love if you can rate it.What do you mean with 30/70 lines? [/quote]
Sure! I would be happy to take a look and comment on it.

Regarding the 30/70 lines. The RSI is a momentum indicator with a scale of 0-100. The traditional use of this is to watch when the RSI line passes either over the 70 level or under the 30 level. The price is considered to be overbought above 70 and oversold under 30 and therefore suggesting a possible reversal is imminent.

However, in practice the RSI line can stay above or below these levels for quite some time. Therefore it is better to just use it as a warning that it might be too late to buy or sell if not already in a position or to take some profit if a position already exists. It is quite risky to enter a reverse position just because the line is beyond either of these extremes. However, once the lines passes back within these two extremes then it might back up some other signal to enter in the opposite direction. Some traders prefer to use 80/20 instead of 70/30.

Personally, I only watch whether the RSI line is above or below the middle 50 line and whether it is in accordance with my entry signal.

No not yet! :slight_smile: we have an old wilderness hut on this lake as a kind of getaway. No running water or electricity. Our water comes from a nearby spring and I have installed a solar panel system to provide some lighting and charge phones, laptop and broadband, etc. These are the only luxuries allowed there :smiley: But I must admit it does feel strange to trade from there…:slight_smile:

I am also just trading some short term quickies and leaving oil on the sidelines for a while. I don’t have a clear view on it at present. Took some pips out of USDCHF this morning just for a change of scenery, haven’t been there for a few years now!

I am also planning to experiment a little to find out just how generic my own method actually is and try out a few index-based trades like US30, UK100,SPX500 - but very, very, gently!!! :wink:

A curious contrast of high and low technology, to be trading oil derivatives via broadband internet, in the absence of running water!

Hi LC! Great to see you here! I like your posts,btw! :slight_smile:

You are right, it is a big contrast, and that is one of the joys of being there, away from the “civilisation”, at least for a few days now and again! It’s a summer thing, of course, not so cool in winter even though it is actually very “cool” then…thank goodness for sauna! :smile: :

What do you trade, LaughingCharlie? And, can I ask, where did your username come from? It is really good! :smile:

1 Like

Hi Manxx, and thanks - and I like your posts.

I’m called Charlie and I’m amused, maybe? (I don’t know where it originally came from but it’s how some of the more irreverent parts of the British media refer to HRH the Prince of Wales.)

Batteries recharged after a week’s break - time to get back into the business…

Last Friday left us with a return to a bearish sentiment and Monday starts us off with an important meeting of the Joint Ministerial Committee for the Follow-up of OPEC and Non-OPEC Countries (JMMC) in St. Petersburg, Russia.

At the last OPEC meeting, the eleven non-OPEC oil producers and OPEC member countries (excluding Libya and Nigeria) agreed to continue with their production cut quotas. Tomorrow’s meeting of the JMMC will look at progress, compliance and possible changes to the programme and the nations involved.

The daily chart from the start of the year shows an overall bearish drift down and last Friday’s decline may well be the start of another significant move down - although there are a number of significant levels only just below present levels where there have previously been clear signs of buyers entering the market.

When the indicators skin is applied over the chart then we see that it only shows a turn down in momentum (i.e. the latest upmove is only on pause,but not yet a clear sell signal. The hourly chart is negative.