Until we see a significant drawdown in crude inventories, the 80-81 resistance should hold for quite some time, hence I would not initiate a long position unless you plan on liquidating on the same day. The dollar and hope of a fast economic recovery is supporting crude
Unfortunately, it ain't so clear-cut IMO. Crude seems to be banking on economic recovery as you so correctly pointed out. But the hope of a recovery is already baked into the stock market, which in turn hinges on the weakness of the dollar that directly impacts the price of commodities. All things considered, I think we're in a period of hodge-podge, or better known as crap du jour in my neck of the woods.
I concur with your assessment, hence my reason for trading intraday only. I got burnt holding 3 cars by the Dubai debacle, ruined my thinks giving.
I have been daytrading oil for a couple of years. I don't know anyone else who trades. Wanted to ask what profit target or how many points you guys go for? Also how many contracts you guys hold at one time? Thanks
"profit target" is techinical stuff, supposed to be the easy part of trading. "profit target" is something that is very strange in trading, the instant thought coming to my mind is dreaming, wishing, hoping or something like that. Remember it is the technical part, you need to solve it before you can move on. I have already told you that it is NOT correct, so you need to find the correct replacement. the number of contracts you will trade is the final stage of trading. I can hardly talk about it, it is so sacred in trading that I will get very very excited even I start to think about it. I am not there, far from it, but someday I will be there. Do you know the possibility? Can you even imagine it? But currently I have other issues to deal with. I am focusing on those issues.
Let me rephrase the question, do some of you guys have a price movement target such as once it moves .50 cent you get out or do you just ride it out until 2.30? Or do you use technical price targets?
I've ONLY sim traded CL, but have been doing this for a couple months now, very profitably (as in 5 losing trades over several weeks of 2-5 day trades). I've tested several strategies over these weeks and the "safest" one has been to wait for the market to open and follow the trend that's in play. So if there's an uptrend in play from pre-market (as there was this morning), I wait 30 minutes, then go long once support is established within the zone of the lower Keltner channel line (I'm using a 5-min one day chart with 20-period Keltner). I move the stop closer as it approaches the upper Keltner channel line. Vice versa for a down trend. This has been a very successful strategy for me in the sim account, but I've only used it over the past week. Anyone else trade this way? Prior to this I was fading overshoots through the upper and lower Keltner channel lines. This also worked very well, but I was using .20 cent stops and often scalping .10-.30 cent profits (not a very strong R:R, but it worked out well) Unfortunately I'm trading a small account that I use for day trading stocks and it's very close to PDT minimum balance so I've not yet jumped into trading CL live because of the volatility. My sim trading has been extremely profitable, but I know from experience that when real money's on the line one tends to cut profits short and that can result in a poor R:R ratio.
It seems to trend one direction only about once a week. But im using 8.30 as the opening, might trend more often for you since your starting later. One thing you will see when you put real money in is that their is alot of flash trading happening in oil right now. Seems you will have 20-100 contracts near the bid or ask and they dissapear when they are .02 cents away.
I've paid no attention whatsoever to that. I've really focused on the 20-period EMA and the Keltner channel lines that mirror the 20-EMA. I've also been using this strategy with ES both live and sim with great success. I need more live, less sim, however! My size in sim has been 1-20 contracts ES, 1-5 contracts CL. My size with live trading has been 1-2 contracts ES, and the 3 times I placed limit orders for CL (none of which were lifted) it was only 1 contract.