4 months ago I started
this thread on the CL. It was more of an FYI thread.
Since then I've traded with limited time dedicated to the CL and recently a few things came to light as I began to monitor it more closely during the day...
1) This thing can move. Which is great if you are like me and like to see some pretty quick results - good or bad.
2) At $10/tick, it doesn't take much of these movements to make some nice profits.
3) With volume in the 100k - 300k range, it's fairly deep for a lesser known contract.
The reason for this new thread is to bring your attention to this contract once again and at least take a look at it during the day while you are trading. Even though the ticks are less than the ES, I am finding the movements MUCH MORE SIGNIFICANT than the ES. Allow me to explain...
1) Today my average win was 26.3 pts and average loss was 8.88 pts. The average win equates to $260/contract. In order to make $260/contract on the ES, I would need 5.2 pts. Here's the problem - AVERAGING 5.2 pts over the day on the ES is not an easy task in my opinion. For me, on the ES, I have many profitable trades that pop for 1-3 pts approximately. So to almost double that would be difficult to say the least.
2) As I said, this contract will tell you pretty quick if you are right or not. I like that. I hate getting into an ES trade that can take hours to develop. With the CL, it's fairly quick.
3) Others have said in the other thread that CL can respect technical analysis better and I would have to agree at this point.
4) It is independent of the indexes and operates on it's own. If you are looking for a contract to trade that has limited correlation to an index, this could be a great fit.
5) Even though commissions are higher, with a larger profit target more achievable here vs. the ES, I don't consider the commissions to be a problem. Also, margins will normally be higher than $500 like the ES. Due to the volatility brokers go into protection mode. Just be aware of what your broker will charge for intraday margins before getting into a trade.
It's worth a look, esp if you have free data through your broker like Open ECry offers. Had it not been for this free access, I probably wouldn't have given it a look.
Before running out and trading the CL, make sure to watch it for a few days/weeks so you can really see it operates.
It can get jumpy and is not for the weak of heart.