Cool. I wasn't 'getting at you' by the way. Just you seem to spend a lot of time in the realtime threads, and I keep waiting for you to post a trade, lol. Maybe learn from them. Still, your explanation makes sense. Good luck
If I'm posting in this thread during RTH, you know we are stuck in a range My strategy is to buy/sell breakouts of highs/lows, position myself early for breakouts through highs/lows via pullback entries, and pure counter-trend plays using a combination of voodoo and mojo I learned from EON Kid.
"Correlation" is probably not a good word to try to pin on the relationships in play. Oil is one component of the global energy business. At any given time supply or scarcity in one market can only have so much of an impact on essentially global pricing. On the commercial side of the trade oil futures contracts are part of this market primarily to hedge price risk between producers and consumers. Here are some useful links to build a picture. http://www.eia.doe.gov/ http://www.energy.gov/ http://www.iea.org/ As NOD points out fundamental "prints" probably have little direct bearing on short term trading. For example, the current stock levels are so far above normal range, there is no real logic for pricing to be where it's at unless you consider things like Political Risk (supply disruptions in producer countries) Anticipated Global Demands FX Relationships, ETC..... Oil is generally "priced" in dollars globally. Most spot pricing is quoted in reference to about 3 or 4 global benchmark prices. Of course purchase prices are translated via FX to what ever currency the purchasers funds are denominated in. Most oil moves globally by ship on a spot basis. In the US the largest collection of refining assets is in Texas (Houston ship channel). Crude flows in via ship (mostly) and flows out as refined product via pipeline (mostly). If crude inflow stopped all refineries up the channel would likel shut down in 5 to 7 days. A little off topic - But this points out that oil (as a commodity) has a lot of moving parts to it..... If you can find a simple correlation - PLEASE let the rest of us know The good new is that you don't need to know all the details to make money trading oil. Technicals are probably much more significant than fundamentals for short term trading.
This is why I settled on CL as my main trading instrument. It's so clean technically (as is 6E) and offers so many opportunities both long and short that I can screw up and make "doh!" trades and easily recover from the mistakes (my max loss is now 15 ticks per trade). What's difficult to recover from is forming an opinion based on news/fundamentals and holding a losing position long past the point where price shouted, "Stop! Go this way, not that way!"
and easily recover from the mistakes (my max loss is now 15 ticks per trade). ND with your # of scratch trades and ultra conservative trading style......are you making any serious money on your 50 k account, enough to do this for a living, or are you still a work in progress. i know with your style you will always be safe, and never get in any serious trouble, but do your gains build towards a professional career cl business money making machine. I am not trying to be critical, just analyzing different trading styles and their long term viability as something you can get rich at, as with crude it is hard work, frustrating, asks many sacrifices, and the goal should be to get rich.....i guess a slight fallback position would be income supplementation........and the value attained from reading markets and making solid trades, but the ultimate goal is to make life changing money. I know you statistically analize every aspect of your trading, you have been trading cl for about 6 months what are your monthly nets?