How Do You Trade Oil Profitably Consistently Now We Are Back At The $100 Midpoint??!!

Discussion in 'Trading' started by spanish89, Sep 5, 2008.

  1. ALoha, i trade crude fulltime for a living..

    Had a great time hitting over £1,000 per week for over 1month, all at just £1 tick, and scalping with at 12tick spread, from a starting account of just £750.

    I paid over £3,000 for rent till end of november in my apaprtment that i moved into, and bough some furniture on creditcard..,
    but then had an extremely bad week last week cos the hurricane making it so unpreditcable!!

    At the moment i have barely £2,600 capital, and need to get back to hitting min £300 profit per week.

    (Normally this shouldn't be too hard since i could technically just trade wednesday inventory number at £2/3tick like normal, and as long as i can click fast enough its an easy 50-150ticks there everytime, but i cant just depend on that for a living).

    For the last few it was so so easy trading oil, especially with my style of trading, as since i knew oil was going down and was gna keep going down as aything above $115 was too high for people to handle, i could simply ONLY do sell trades, and just scalp during the day selling off every peak and spike with a giant stoploss off over 1000ticks, because i knew that oil wasnt going to rise back up $10s+ after the spikes.

    But now we have got to under $110, approaching the $100 mark,
    how on earth can you consistently make profit on trades??

    And feel safe on your trades, when you don't know what direction the oil will be going in the medium-longish term??

    I use S&R levels as my entry and exit points when scalping, but before i only specialised in just selling, and just ignored it when it went as low for the day as i thought i was going to.

    But now its so so sooo uncomfortable because i have no way of having any sort of edge/strong indciation in which direction the price will be going in the medium term.

    How do the rest of you consistently make 100ticks+ profit per day, everyday, now that we have come down to this uncertain level???

    If any of you traded crude over 5years ago before the rise started id be extremely greatful if you could explain and give some tips and advice on how your identified the daily/weely trend each day back then when the market was so flat??

  2. Difficult question to answer here because the only way to trade successfully is to develop a strategy that works in all market conditions. Your strategy is very similar to mine. Sounds as though you are selling the spikes up with wide stops, which is pretty much what I do. I will add to a losing trade but very carefully on this beast because this thing can go on some relentless runs. What I would suggest at first is to reverse your strategy and lean toward the long side. Instead of selling the spikes up buy the spikes down. I think 100 is going to be a huge psychological level on this instrument but anything can happen. Oil is beginning to trade closer to its fundamental value and the volatility has dropped off considerably. Just repeat what you've been doing except be more open to the long side and realize that we probably aren't going to see the same kind of volatility that we just saw. This contract frequently went 4 sigma. Now 3.5 seems to be the extreme. That may change, for better or worse so you have to study the behavior and stay "in touch."

  3. Cheers for the reply mate..

    Im not trading till Tuesday when the IEA meets, so we can then findout what the next medium term trend is.

    (I dont actually buy the dips though mate, only sell the spikes.)
    Since i 1st define the market midterm trend, and then only trade that direction, so even if i get caught a few dollars offside at worst by calling the top too low, i can always wait it out for a day or 2.
    But if i make a mistake and buy too high, the market could crash further and may not return to that high level for weeks/months/years even!

    Im hoping the IEA does cut production a little bit, especially if we are near $100, so we can then get a nice quick spike for a few days/weeks back up to $114/120, taht i would feel safe enough in buying as it would have strong corporate trades carrying it up + the speculators,
    and then i could have even more fun selling it all the way back down to the $60/80s.

    Since we have now foundout that the world cannot handle over $125 oil...

    We can force the price up there again if we want,
    but in the end the trades will be the only 1s who are actually able to afford the oil cos our leverage, as sthe public wouldn't be able to afford it,
    and so the price will have to fall again. :)

    But the thing im not looking forward too is if the IEA don't cut production..., then what???

    :confused: :confused: :eek: :confused: :confused:

    We basically just have to sell all out and hodl for a few weeks?? :confused:

    Cos the wont be any chart levels for us to scalp off as S&R lines... :(
  4. Ah, my mistake. I didn't know you were holding overnight. I would say a bounce is overdue so you may get a chance to sell a run up but I don't think we are out of the inflationary run up we just corrected from. I think Oil is eventually going higher along with another run in commodities so be careful holding this overnight with a wide stop. I don't hold this overnight because I think the risk is too high so I'm probably not much help to you :(

  5. Can i also ask for your help and experience with 1 thing please..

    When you trade in the same sort of style as i do, trading the retracements off the spikes, how do you work accurately when the rally line has come to an end??

    And if you trade both ways, how would you decide when it was time to close a trade for loss??
    And how much would you let it go into loss max??


  6. Nah i dont trade overnight, except on exceptional circumstances...