Hi, I have been trading forex for 3 years now, successfully for about a year now. But now i am looking to diversify my portfolio. I mainly trade on Elliot, so i was wondering what type of approach do you use when trading, oil or natural gas? Is there any spot market that trades those? or are options the only way to trade gas and oil? What are the minimum requirements for such accounts? and what type of risk management you use when trading these items. I know that my questions are really vague, but i am just trying to get my feet wet. Thanks!!
OIL FUTURES: http://www.nymex.com/CL_spec.aspx http://www.nymex.com/QM_spec.aspx The CME & ICE have other futures products available as well. As for margins/rates, you'll have to contact a futures broker. I use Open ECry and you can demo their software for free. http://www.openecry.com Actually - here's a list of all available contracts they offer - http://www.openecry.com/software/available.cfm You'll want to click on the energies tab to see what is available there.
Energy can move quickly, which I favor...but is unforgiving. Very, very exciting market. Right now it's tracking equities pretty closely, whereas it rarely used to. You may want to consider trading the majors, that is light crude & natural gas. I love the liquids sometimes but they're really wide spreads & if you move size then they're really wide spreads. Good luck with it. Trade very lightly until you're successful for many consecutive months. GL The volume on CME GLOBEX is very good but CL seems to be most liquid. It also trades on ICE.
Dodo: If by using the term "Elliot" you mean Elliot Waves please be prepared to take PLENTY OF HEAT on a flat-price directional position in energy based upon wave count. Same usually holds true for oscillators in energy - but in my opinion, less than a wave count.
I started by trading USO Options for a while. Right now I am trading swings in the Futures market. Looking for a swinging pattern on the intra-day charts. Working fine on a limited trial for now. One or two trades a day max. (cautious).
For energy futures I trade NYMEX: CL - Crude QM - mini Crude (symbol changes from platform) NG - natural gas QG - mini nat gas RB - unleaded gas HO - heating oil Margin for crude is about $7500, half for mini nat gas is about $5500 i think. used to be nat gas was more volatile, but crude has taken that spot in the last year. recently, crude is less volatile, but has 1-2 days a week with large swing of $2 + test out the mini contracts first. the spreads between months and also crack spreads (spreads between crude and unleaded gas/heating oil) have a good market.
I traded financial futures for years, then when the Oil markets got really busy and pushed up to $147 per barrel I had a dabble, turned out to be the best move I ever made - great volatilty and liquidity, I pretty much just swing trade it in small size with stops wide enough to give the trade a chance but not too wide that 3 bad trades in a row and I'm in trouble. I still do a small amount in the 30yr but it's becoming smaller by the day. You can trade oil on ICE - WTI (West Texas Intermediate), but I trade it on NYMEX - CL (Light,Sweet Crude Oil) because the volume is bigger, which personally I prefer. Best of Luck in there !