[brownsfan019]

I have an idea - and it's game changing so hang on --

If you trade the contract w/ the highest volume, you can never go wrong.

A quick glance at your platform can tell you in a matter of seconds, at most 1 minute.

So to end this once and for all, I propose that if you simply watch volume and trade the contract w/ the highest volume, you will always be trading the best contract available at that time.

Please remember to say thanks for this Earth shattering post.

[rs1]

Ok, here is my take if anyone cares. I think it is essential to be aware of and in control of all aspects of your trading. This includes knowing the last trading day/ first notice day of all the products you trade. Especially if you hold overnights on a swing or long term basis.
This information is freely available on the exchange websites. Relying on volume or your broker alone is a dangerous game, in my opinion. Although it can be a useful indicator, if you are already aware of the fn/lt day.

Ultimately, it is up to you what you decide to do. You should think about what has been written and see if it makes sense for you. Just trying to give you something to think about.

Best of luck

[macdfx]

Originally Posted by rs1 »

Ok, here is my take if anyone cares. I think it is essential to be aware of and in control of all aspects of your trading. This includes knowing the last trading day/ first notice day of all the products you trade. Especially if you hold overnights on a swing or long term basis.
This information is freely available on the exchange websites. Relying on volume or your broker alone is a dangerous game, in my opinion. Although it can be a useful indicator, if you are already aware of the fn/lt day.

Ultimately, it is up to you what you decide to do. You should think about what has been written and see if it makes sense for you. Just trying to give you something to think about.

Best of luck

Agreed.

It is silly how many traders (newbies and pikers alike) don't know the specs of the contracts they are trading, nor do they know how to find out.

[Dinerotrader]

That was one fast sell off in the final minutes of oil today. Here is the 5 minute chart for the past 3 days. Morning gap fill was pretty textbook it seemed because of the strong S/R at 83.43 which helped pull price there and then send it on its way.

[Dinerotrader]

For those that trade oil, what types of strategies do you find most beneficial? I mostly trade reversals based on S/R, 123 setups, and lately been trying to work some trendlines into what I do. My usual problem is that some days I am raking it in and others, I get chopped to death with the small ranges. Overall, I am mostly working on getting my entry signals limited to 3-6 per day and upping my win rate on those. I started using a fixed stop loss of 12 ticks to limit my intervention in each trade and that has appeared to be good for me thus far.

I think EnochBenjamin has a thread in the Candlestick section of TL explaining how he watches for tweezer and shooting star candle formations which breakout of the VWAP.

I thought it would be good to get some general strategy ideas from those trading oil to include in this thread.

[enochbenjamin]

Filters are what I find important in trading oil. There are so many signals and if you take them all you will lose!

Trendlines
I think trendlines are very important in avoiding the chop in oil. Wait for the candle to close below the trendline if you want to be conservative. A really good way to construct trendlines with oil is to connect higher low fractals for up trendlines. More on fractals later.

Time of Day
From 10:30 - 12:15/12:30 CST illogical moves happen on low volume. Avoid trading this time of day. Don't worry about the periodic days when big moves happen during this time - they are tricky. Between 12:30 and 1:15 a strong move in one direction will occur almost EVERY day. more often than not it is EOD profit taking and will be counter to the days move. It will start slow and be violent and fast towards the end.

Support & Resistance
S&R are critical to getting low risk entries. VWAP/Standard Deviation, Pivot Points, Yesterdays high, low, close. Look for confluence of multiple levels coupled with a trendline break for breakouts and look for a shooting star into the same levels for fade moves.

Position Size
If you want to catch a big move in oil it is best you use multiple contracts and take profit on 1 at a predetermined price so that you can lower your risk on the runner. For example, if you trade 2 contracts with say an 8¢ stop. Take profit on 1 contract at 10 ticks (fairly easy if you entry is good). Now you essential are playing with the houses money on the second contract - even if stopped out you are up $20. So let that baby run to the next logical turning point (pivot, SD, VWAP, whatever). Utilizing this method will keep your losses small while allowing you some nice winners - often with 5,8, 13:1 ratios.

Money Management
If you want to trade oil for the long run you better be disciplined about knowing when its not your day and quitting! Have a daily loss limit and stick with it! Make sure the daily loss limit is smaller than your average winning day. I repeat quit when you hit this number! Also have a value that once hit - the worse you can do is break even. For example if you book $500 at any point in the day - make sure you never go below zero. You can make money quick in oil but you can lose it quicker. Another way of dealing with this is quitting after 3 losing trades in any session. In oil more as with any other market I have traded disciplined money management is the key to staying alive. Oil is more volitile than most markets so the tendancy to overtrade is greater and thus the possibility of losing big increases.

Be careful, be disciplined and oil will be good to you. Just remember to repeat before every trade "the market pays you to be disciplined!"

[brownsfan019]

Originally Posted by enochbenjamin »

Time of Day
From 10:30 - 12:15/12:30 CST illogical moves happen on low volume. Avoid trading this time of day. Don't worry about the periodic days when big moves happen during this time - they are tricky. Between 12:30 and 1:15 a strong move in one direction will occur almost EVERY day. more often than not it is EOD profit taking and will be counter to the days move. It will start slow and be violent and fast towards the end.

It's interesting you say avoid the first 2 hours and I try to be done by then.

Beauty is in the eye's of the beholder but IMO to not trade when oil is really moving can be a detrimental rule to have in place.

[enochbenjamin]

Originally Posted by brownsfan019 »

It's interesting you say avoid the first 2 hours and I try to be done by then.

Beauty is in the eye's of the beholder but IMO to not trade when oil is really moving can be a detrimental rule to have in place.

Brownsfan - I think you misunderstand what I said - I agree that if you can finish during the first 2.5 hours it is in your best interest. I am stating to avoid the middle 2 hrs of oils pit session - from 10:30 - 12:30 central standard time. The oil pit has been open since 8am CST giving you a good 2.5 hrs to make hay.

For me personally I always try to finish by 10:30 am CST.