Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Dinerotrader

Oil Trading

Recommended Posts

It has come to my realization many times that I learn things better when I force my mind to put thoughts into the written word. I have thought about starting an oil thread for quite a while but never did. So here were go.

 

My hope is that this will be a good place for those that trade oil to exchange thoughts and ideas about historical analysis, tomorrow’s expectations, news events,etc. Brownsfan has a great post here which goes through some of the basic facts about trading oil but I’ll do a quick version to help the thread stand on its own.

 

attachment.php?attachmentid=20081&stc=1&d=1268771784

 

Light Sweet Crude Oil Futures Info

 

NYMEX Contract symbol: CL

Open ECry margin requirement: ~$2,700

Pit open: 9:00 am EST

Pit Close: 2:30 pm EST

Tick Value: The trades in increments of $0.01 which represents $10 per tick per contract traded. Nice and easy.

 

Monthly Contract rollover:

The CL contract rolls each month. I keep a quotes screen up that has the current month and the next 2 months in advance with the total volume info listed so that when the next month’s contract starts trading with higher volume than the current month, I rollover. Here is the month lettering for rollover:

 

attachment.php?attachmentid=20076&stc=1&d=1268770261

 

Weekly Inventory (EIA Petroleum Status Report):

Each week The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. It normally comes out every Wednesday at 10:30 EST but there are several times during the year when it is moved to another day due to holidays and such. Do not hold trades through this or execute trades into this report until you have experience. Historically, price volatility is more narrow from pit open to the time of this report so I make my profit targets very small if I am going to trade at all on Wednesday morning.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

 

Here is a historical look at the CL over the past years.

 

attachment.php?attachmentid=20074&stc=1&d=1268770261

 

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Historical S/R provides surprisingly consistent reactions from price. Here are the major levels I keep on my chart.

 

attachment.php?attachmentid=20075&stc=1&d=1268770261

 

The main purpose of this thread is to help those trading oil make more money trading oil through useful exchange of ideas and information. This is not my personal trading log.

5aa70fe8e87e4_3-16-201003.png.c4ce1d95d342cf33a8f50984e9cc1d32.png

5aa70fe8efe68_3-16-201004.thumb.png.c7246f1521447df42f749448de71f6a5.png

5aa70fe8f3116_3-16-201005.png.cb151370a9918c6518b80cbf760d0bbc.png

5aa70fe918d49_3-16-201006.png.4766a0e2ee97e48571e819f1f6b25de1.png

Share this post


Link to post
Share on other sites

Thoughts on tomorrow.

We were at this same level on Wednesday last week when oil came out and we got a huge up and down move. The pink area noted below can be pretty choppy especially on a Wednesday before inventory so I might sit out the trades until inventory comes out. We'll see how the price action looks.

 

attachment.php?attachmentid=20083&stc=1&d=1268774777

5aa70fe91dfa9_3-16-201009.png.bf81c6fde5f9c40afd30a5511f64b5d4.png

Share this post


Link to post
Share on other sites

Cool thread. Since I'm taking my CL trades live now I thought I'd chime in.

 

Here my longer term chart. I was looking for longs down at 79.40ish. I got a stop order in but it never filled. The level bent too much for me and I didn't catch the move up.

 

I'm now hoping for a pullback to 80.76ish, or a short near 83.04 OR an upside breakout about 83.04.

 

20100317-keiwnmyjtd5g77ed3f2n4mj4et.preview.jpg

Click for full size - Uploaded with plasq's Skitch

Share this post


Link to post
Share on other sites

Oil is currently split in it's volume as rollover approaches. It's also providing some very tight trading yesterday and today.

 

Trading these tight ranges can be difficult, so tread cautiously when you see the volume being split between contracts. Oil rolls monthly and since it's not as big a market as say the ES, when 50% are trading 1 contract and 50% the other, it can be difficult to get sustaining moves IMO.

Share this post


Link to post
Share on other sites
Oil is currently split in it's volume as rollover approaches. It's also providing some very tight trading yesterday and today.

 

Trading these tight ranges can be difficult, so tread cautiously when you see the volume being split between contracts. Oil rolls monthly and since it's not as big a market as say the ES, when 50% are trading 1 contract and 50% the other, it can be difficult to get sustaining moves IMO.

 

Good points BF. Here is how the volume ended up today between the J,K, and M contracts. I am hoping to not change over to the K contract until Monday so I can redo all my charts over the weekend.

 

attachment.php?attachmentid=20162&stc=1&d=1268942059

5aa70feb8da54_3-18-201009.png.09d833950f4c6abffdfbb3fedfedac7c.png

Share this post


Link to post
Share on other sites
Good points BF. Here is how the volume ended up today between the J,K, and M contracts. I am hoping to not change over to the K contract until Monday so I can redo all my charts over the weekend.

 

attachment.php?attachmentid=20162&stc=1&d=1268942059

 

Had to switch to the K contract this morning.

 

attachment.php?attachmentid=20187&stc=1&d=1269005818

5aa70fec457d2_3-19-201001.png.0b5ba9462a3793e12e7c671a68b4c2ef.png

Share this post


Link to post
Share on other sites
Are you on the K contract JB? B/c this is great today - awesome volume and awesome moves.

 

attachment.php?attachmentid=20232&stc=1&d=1269276333

 

I'm on the 4/10 contract. Dangit, why is the 5/10 all of the sudden so much better? The vol has been fine on this contract all the other days, it's weird. Isn't this the front month?

Edited by jonbig04

Share this post


Link to post
Share on other sites
I'm on the 4/10 contract. Dangit, why is the 5/10 all of the sudden so much better? The vol has been fine on this contract all the other days, it's weird. Isn't this the front month?

 

Everyone switched to the K contract on Friday. Did you see my post above?

Share this post


Link to post
Share on other sites
Everyone switched to the K contract on Friday. Did you see my post above?

 

yea, I thought people were switching from the March to the April, not from the April to the May. What the heck.

Share this post


Link to post
Share on other sites
I wish it were that simple, but yea I'll get it figured out. :cool:

 

How is it not simple?

 

Create quote window/workspace with CL contracts - as you saw what I did.

Check it daily.

Trade contract w/ the biggest number.

 

As Dinero pointed out, rollover was occurring last week. If you didn't realize that, then you probably shouldn't be trading this until you understand what contract to be trading.

Share this post


Link to post
Share on other sites
So is it safe to say the majority of the volume will be on the K contract rather than the J? Or does it just depend on the day?

 

I am no expert but I have never seen a day where the volume on the next oil contract in line was larger than the prior on one day and then switch back to having lower volume than the prior. It seems like once the volume switches to the next contract, that is where the larger volume stays.

Share this post


Link to post
Share on other sites
How is it not simple?

 

Create quote window/workspace with CL contracts - as you saw what I did.

Check it daily.

Trade contract w/ the biggest number.

 

I suppose I could do that if the volume is going to flip flop between contracts. If not, there is really no point, I'll just stick with the new one. The reason it's not so simple for me is just because m y setups usually take a few days to fully play out. It just means I'll have to have separate workspaces for each contract which is no big deal.

 

As Dinero pointed out, rollover was occurring last week. If you didn't realize that, then you probably shouldn't be trading this until you understand what contract to be trading.

 

Why not? It's obviously pretty easy to see when your watching the wrong contract lol.

Share this post


Link to post
Share on other sites
I am no expert but I have never seen a day where the volume on the next oil contract in line was larger than the prior on one day and then switch back to having lower volume than the prior. It seems like once the volume switches to the next contract, that is where the larger volume stays.

 

Cool. I was a month behind. I was trading the March while everyone else was trading the April. When everyone rolled over, so did I...to the older contract haha. Stupid. Easy fix though.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 29th March 2024. GBPUSD Analysis: The Pound Trades Higher But For How Long? The global Stocks Markets are closed due to Easter Friday (Good Friday). The NASDAQ continued to follow the sideways trend while other indices again rose. The SNP500 reaches an all-time high, but the NASDAQ remains under pressure from Tesla, Meta and Apple. The Euro continues to trade lower against all major currencies including the US Dollar, Euro and Japanese Yen. The British Pound is the best performing currency during this morning’s Asian session. However, investors are largely fixing their attention on this afternoon’s Core PCE Price Index. GBPUSD – The Pound Trades Higher but For How Long? The GBPUSD is slightly higher than the day’s open and is primary due to the Pound’s strong performance. At the moment, the British Pound is increasing in value against all major currencies. However, the US Dollar Index is also trading 0.10% higher and for this reason there is a slight conflict here. If investors wish to avoid this conflict, the EURUSD is a better option. This is because, the Euro depreciating against the whole currency market avoiding the “tug-of-war” scenario. The GBPUSD is trading slightly lower than the 2-month’s average price and is trading at 49.10 on the RSI. For this reason, the price of the exchange is at a “neutral” level and is signalling neither a buy nor a sell. The day’s price action and future signals are possibly likely to be triggered by this afternoon’s Core PCE Price Index. Analysts expect the Core PCE Price Index to read 0.3% which is slightly lower than the previous month but will result in the annual figure remaining at 2.85%. The PCE rate is different to the inflation rate and the Fed aims for a rate between 1.5% to 2.00%. Therefore, even if the annual rate remains at 2.85%, as analysts expect, it would be too high for the Fed. If the rate increases, even if only slightly, the US Dollar can again renew bullish momentum and the stock market can come under pressure. This includes the SNP500. Investors are focused on the publication of data on the UK’s gross domestic product (GDP) for the last quarter of 2023: the quarterly figures decreased by 0.3%, and 0.2% over the past 12-months. This confirms the state of a shallow recession and the need for stimulation. The data, combined with a cooling labor market and a steady decline in inflation, increase the likelihood that the Bank of England will soon begin interest rate cuts. In the latest meeting the Bank of England representatives did not see any members vote for a hike. USA500 – The SNP500 Rises to New Highs, But Cannot Hold Onto Gains! The price of the SNP500 rises to an all-time high, before correcting 0.33% and ending the day slightly lower than the open price. Nonetheless, the index performs better than the NASDAQ which came under pressure from Tesla, Meta and Apple which hold a higher weight compared to the SNP500. For the SNP500, these 3 stocks hold a weight of 9.25%, whereas the 3 stocks make up 14.63% of the NASDAQ. The SNP500 is also supported by ExxonMobil’s gains due to higher energy prices. The market will remain closed on Friday due to Easter. However, the market will reopen on Monday for the US and investors can expect high volatility. Investors will also need to take into consideration how the PCE Price Index and the changed value of the US Dollar is likely to affect the stock market next week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • MT4 is good and will be good until their parent company keep updating the software, later mt4 users will have to switch to mt5.
    • $SOUN SoundHound AI stock at 5.91 support area , see https://stockconsultant.com/?SOUN
    • $ELEV Elevation Oncology stock bull flag breakout watch , see https://stockconsultant.com/?ELEV
    • $AVDX AvidXchange stock narrow range breakout watch above 13.32 , see https://stockconsultant.com/?AVDX
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.