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If you guys are looking for a contract that doesn't wait around and will let you know real quick if you are right or not, the CL is the place to be. So far this week the results are such that I can't even watch the ES much b/c I can't afford to miss a setup on the CL. I like quick and easy - either I am right or wrong and there's no waiting. If that suits you and your personality, the CL is one nice contract.
So far, 3 trades this morning at +125 pts net and working on a long position currently. 125 = $1250/CONTRACT. I would need 25 ES pts on a per contract basis to mimic that. 
Seems to me that the risk/reward over here is far superior to that of any other futures contract, incl the big boys - ES, NQ, etc. Even though the CL could be viewed as more 'risky' b/c of the volatile moves, I would actually argue that it's less risky due to the phenomenal risk/reward ratios. |
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Hello brownsfan,
I think the energy market ( Oil, NatGas) is a great place to be for profitable traders...much more interesting than most indices and currencies. However, regarding the risk/reward ratio, I'm not so sure whether oil is better than e.g. the ES.
Moves in both oil and natural gas can be so sharp and drastic that, I'm afraid, no stop loss will help if the market goes the wrong way. I know of a trader who almost lost 6k USD per 1 CL contract in one single sharp move when buses in London where bombed ( don't remember the date). He told me he did have a SL in place...I know that on the same day I was following the ES, it would have allowed you to get out of the down move with much smaller losses.
I personally would not want to trade CL with less than 7-8 k. These major events are rare, but they do happen, and if one made use of the low margins offered by some brokers one could go bankrupt pretty easily in a matter of seconds.
But nevertheless, CL is great...
Good trading
