Monday Dec 19, 2016 EPIC the Oil Algo Oil Report (Member Edition). FX: $USOIL $WTIC ($USO, $UCO, $SCO, $CL_F, CL, $UWT, $DWT, $ERX, $ERY, $GUSH, $DRIP)
Welcome to my new FX: $USOIL $WTI oil trade report.
NEW: We are having a technical coding issue with SMS text / email alert launch – will be resolved soon! For now we are emailing alerts as time allows.
NEW: There is a new feature blog post at this link, “Why our Stock Algorithms are Different than Most” If you are using our algorithms it is a must read.
MULTI-USERS: Institutional / commercial platform now available for multi-users – pricing and product information will be posted to website soon.
PATENT PHASE: As I mentioned I am now in patent application phase. Stay tuned for agreements concerning disclosure and use coming to members.
24 HOUR TRADE ROOM: My charting transitions from FX $USOIL $WTI to 24hr crude oil futures early 2017. My sub service w incl 24 hr crude oil trade room.
PRICING: My proprietary services transitioned recently from free inaugural to subscriber only access. All rates for existing members for all service prices will be grandfathered in perpetuity (view website products page for conditions). Early 2017 when my 24 hour futures trading room opens along with 24 hour live charting I will have a rate increase but as with recent roll-over existing members will be grandfathered at locked-in current rates.
SOFTWARE: My algorithmic charting is going to developer coding phase early 2017 for our trader’s dashboard program. Please review my algorithm development process and about my oil algorithm story on our website www.compoundtrading.com and my oil algo charting posts on my Twitter feed.
HOW MY ALGORITHM WORKS: I am an algorithm in development. My math is based on traditional indicators (up to fifty at any given time each weighted on win ratio merit) – such as simple math calculations relating to price and volume, Fibonacci, simple pivots, moving averages, Gann, Schiff and various other charting, geometric and mathematical factors. I do not yet have AI or Geo Political integration – only math as it relates to traditional indicators – weighted, with the primary goal being probabilities. I am not a high frequency or bot type algorithm – I am to be used (represented on a traditional trading chart) as a probability indicator to give our trader’s an edge when triggering entries and exits on trades with instruments that rely on the price of crude oil (specifically FX: $USOIL $WTI and transitioning to futures in the new year in our new 24 hour oil trading room).
Below you will find my simplified view of levels that can be used on a traditional chart to advance a traders’ edge (both intra-day and as a swing trader or investor). This work, and your subsequent trading, should be considered one decision at a time, “if this happens then this or this are my targets”… price – trigger – trade and so on. If you need assistance email your questions to email@example.com, message our lead trader on Twitter, or message a lead trader privately in the trade room.
FX: $USOIL $WTI Observations:
Below is the link for the live EPIC the Oil Algo Live Trading Chart for Monday Dec 19, 2016.
Intra-day Crude Oil Trading Range: At time of writing FX $USOIL $WTI is trading at 52.29 3:47 AM ET Dec 19, 2016. Some thoughts with respect to traditional charting that may help advance you trading edge:
Multi Week Trading Range for Swing Trading:
Note: Be careful with the prices you see in the purple boxes on the right of the chart – they do not line up on chart for price action (they are for indicators).
Pay attention to the upward trending channel – you can enter long and sell in between the channel yellow lines as it trends. If price stays below the resistance then you trade the channel under that and if above a major support line same thing (yellow lines).
Price is currently trading above a horizontal support at 51.93 (yellow line) – watch this for support.
If you have any questions email firstname.lastname@example.org with direct questions for direct answers. Or ask in the trade room in a private message to the lead trader.
Diagonal Trend Lines:
Diagonal trend-lines (blue). Diagonal trend-lines are critical inflection points. Please review many of my recent posts so you can learn about how important these diagonal trend-lines are. If one is breached you can look to pull-back to next diagonal blue trend line about 90% of the time. Also pay attention to how thick the lines are – the thicker the line the more important because they represent extensions from previous time / price cycles.
Some of the diagonal trend-lines are marked with a green arrow on the chart above. The bottom of that triangle time price cycle also has a diagonal trend-line right there.
Remember you can come in to the chat room to message the trader and REMEMBER I have posted a live chart link earlier in this post so if you can’t see the lines well on this chart above you can go to the live chart link and watch for member live algo chart links through-out the day in your email inbox!
Price Action with 20, 50, 100, 200 MA
Because I review various MA’s on various time frames on daily posts it is a good idea to go back and review previous posts so your bu – sell triggers are known.
Below is how oil has been trading with 20 MA on the 4 hour chart – fairly predictable buy / sell triggers.
— Compound Trading (@CompoundTrading) December 19, 2016
20 MA on 4 Hour Buy – Sell Trigger. Crude algo intra work sheet 407 AM Dec 19 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT #algo
Price is currently (434 AM) above the 20 MA – a buy signal relative to this indicator.
Fibonacci levels on crude oil chart for tight intra trading.
Watch these lines for support and resistance. Careful using them as traditional retracement levels with crude because the algo lines etc are more dominant / predictable. But the Fib lines are excellent indicators for intra-day trade support and resistance.
Horizontal Trend-Lines (purple):
Horizontal trend-lines are not as important as the other indicators reviewed above, however, they do serve as important resistance and support intra-day for tight trading and they are important if thick (in other words they come from previous time / price cycles). WE STARTED TO REPRESENT THE REALLY IMPORTANT LINES IN YELLOW FYI FOR EASE. Refer to chart for current applicable horizontal trend-lines.
Respect support and resistance lines:
If you can be patient and take your long and short positions against these yellow lines – that is your highest probability trading.
Intra day (415 AM) crude is trading just above one and in overnight trade it hit a diagonal yellow line (on chart pink arrow – mid channel line in upward trend) and that is its current resistance.
Oil Time / Price Cycles:
Time / price cycles are the single most important indicator and my record calling them is near 100% – since inception seven months ago. The reason they are so important is that a trader does not want to be holding a crude oil instrument at termination of a time cycle if not absolutely sure if price will go up or down. A trade may choose to enter a large position in advance of a time price cycle termination IF THERE IS A HIGH PROBABILITY OF A DIRECTION IN PRICE and if the market is trading at a really important pivot area. In other words, if the market is trading at the bottom of the upward trending channel at a support (yellow lines) and we knew there was a significant probability of a time cycle about to terminate a trader may enter with a long position. The price really spikes or drops significantly when these important time cycles terminate.
The problem with time / price cycle terminations is they change from minute to minute (depending on where price is on the chart) so you have to be in the trade room to get the alert. Our lead traders will do everything they can in future to send these on SMS but we have to be careful because it can be difficult with so much going on in the room. The reason they (time cycles) change is because they are actually represented by or are geometric shapes in the chart – I know it sounds odd but I have (as I mentioned) hit these calls just shy of 100%. The oil political people know the same algorithmic modeling principles and they ALWAYS TIME THEIR BIG ANNOUNCEMENTS AROUND THE TIME PRICE CYCLE TERMINATIONS.
So if you can picture a triangle on the chart – and price is trading in the triangle – and price is going to come to the edge of the triangle and there is a significant support or resistance or an algo line terminating there too or a target (those type of things)… then we know there is a high probability of a time and price change. In other words, it is where there are clusters of algorithm points that cross and when price is going to cross over that cluster is where they are. And these are represented on all the different time frames – the larger the time frame – the larger the time price cycle termination – the larger the spike or downdraft. This is where we establish our intra-day quadrants from for sniping trades (which we will put in to the room soon because it looks like the geo political rhetoric is over for a while making them more predictable). Difficult to explain in short. So we will do our best to SMS alert these in future.
Also, the real large or important time / price cycle terminations we know far in advance and they can be put in these newsletters.
If you review my Epic the Oil Algo Twitter feed, my blog posts and my story on our website you will get a feel for how accurate these calls are.
I wrote last:
THE CHART ABOVE SHOWS CRUDE TRADING IN A TRIANGLE (in white). If the price stays in the triangle price is 99% going to spike significantly to the upside or downside before it leaves the triangle at or near the end (usually well before the end). In this instance if price is still in triangle at 1:00 Friday (red dotted vertical line) this could very well be when price will spike or drop out of that triangle.
And that is exactly what happened – the price did get close to the vertical dotted red line representing the Friday 1:00 time for rig count and as I wrote above the price did get volatile as it left the triangle.
The next time cycle is represented on the chart above – it is the triangle price is currently trading. It is highly probable that trade will leave this time / price cycle (represented as a triangle) prior to Tuesday 4:30.
Watch these triangles for entries because price can get violent as price enters or leaves the triangle.
We will update you in the trading room or by email notice if any other significant time / price cycles occur intra day.
Alpha Algo Trading Trend-Lines (Red dotted lines):
To determine which algo line is most alpha (or probable) intra day, it is the nearest line to price action. This can also help you determine the trend of trade. If the algo line is trending up the price will follow it up until price is tested at an algorithm indicator (the main tests are diagonal trendlines, horizontal trendlines, time / price cycles etc – as I have shared with you). This is why it is important to watch all the lines because they are all support and resistance. To keep it simple trade the range (yellow lines) as I’ve mentioned but keep an eye on these indicators.
The alpha algo trendlines are on the chart above (red dotted diagonals) – there is one far below price and two above.
Current Alpha Algo Targets (Red circles):
Price missed the alpha target on Friday at 1:00 PM – but I did warn you that it was low probability and for those in the trading room we knew intra day exactly where crude was going to trade (live video available) – we did an intra day algo line set-up because we knew crude was unlikely to hit the targets on the chart – and crude followed the lines we set up for the day exactly.
So what is your most probable algo target for Tuesday 4:30 EST? Your closest target that crude is trending toward is always the most probable. Crude is currently trending toward a target (red circles on chart) Then, your second most probable is the one that is up or down trend depending on whether general price is in an upward or downtrend for the most recent week or so and what your other indicators look like (such as the MA’s I explained above).
The other way to determine which targets are in play is actually quite simple, you will notice that crude trades between the channel lines up and down and up and down and there are various support and resistance along the way. If it hits a target at the top of the channel you can bet most times (unless the next day like today) that the next target hit will be at the bottom of the channel or whatever – also difficult to explain – WE ARE DOING A VERY DETAILED VIDEO ON THESE INDICATORS SOON THAT WILL SHOW IN MORE DETAIL.
The targets for this week are represented on the chart above. Again, refer to the live charting I send you for this also or be in the trading room.
I am currently watching the math on two other possible algo lines developing that I will report on soon – SO THE TARGETS FOR THIS WEEK ARE NOT CONSIDERED HIGH PROBABILITY – THEY ARE SOFT TARGETS AT THIS POINT.
Wait for the price to trend toward a target and take your position and watch as price gets closer and closer to the target. Remember, that the machines trade from decision to decision – or in other words from support to next resistance or resistance to next support or when the times come each week on Tuesday Wednesday and Friday they will trend toward the target that market price action determines they go to.
Our lead trader will explain more in the room and do not hesitate to ask our lead trader in the room by private message or on twitter to explain intra day decisions.
Oil Intra-Day Algo Trading Quadrants:
We expect to publish the updated ones at latest Tuesday – we are currently running the charts.
As explained above, my algorithm is a consideration of up to fifty traditional indicators at any one time – each one given its own weight in accordance to its accuracy (win rate). This is how we establish the probability of specific targets hitting (we call them alpha algo targets).
Alpha Algo Targets, Algo Trend-lines, Algo Timing, Quadrants for Intra Snipes:
Algo targets are the red circles – they correspond with important times each week in oil reporting land. Tuesday 4:30 PM, Wednesday 10:30 AM and Friday at 1:00 PM. The red dotted diagonal lines are the algo trend-lines. And the vertical dotted (red or green) are marking the important times each week. You will find that the price of crude will hit one of the alpha algo targets about 90% of the time. In the absence of market direction the machines take price to the next algo line and/or target. Understanding how the price of crude reacts to the algos and how they move price from target to target is critical for intra-day and swing trading crude oil and associated instruments.
You will notice that price action of crude will use these algo trend-lines and act as support and resistance, and that price also often violently moves when an alpha algo line is breached either upward or downward.
We cover this in much more detail in the member updates, trading room. A review of my Twitter feed and previous blog posts will help you understand the relation of these indicators. We will start posting video blogs (for my subscribers) on YouTube (in addition to my daily blog posts) for swing traders that work during regular trading hours.
Also… we will cover how to establish algo trend-lines and price targets future forward (as you have seen me do on my Twitter feed for some time now).
That is a good place to leave it for now – we will review details of the above in the trading room and when time allows we will segment for our swing traders (and publish) videos of the work we do in the trading room.
See you in the live trade room and if not stay tuned for our videos recapping what happens in the room! And again, if you struggle to know how to use these indicators as a trader’s edge, it is recommended that you obtain private coaching prior to trading a real account with real money – we recommend you use a paper trading account at first. And finally, we will be publishing a “how to use guide” within a day or so, but it will be simply be a recap (consolidation) of instructions in this post, from my Twitter feed, and previously published information on our website. You can also send specific questions to our email inbox at email@example.com – if you do this be sure to ask a specific question so it can be answered specifically. When the 24 hour oil trading room opens you will have ample opportunity in that 24 hour room to ask questions also.
Watch my EPIC the Oil Algo Twitter feed for intra day notices and your email in box for member only material intra day also.
EPIC the Oil Algo
PS If you are not yet reviewing the daily post market trading results blog posts, please do so, they are on the blog daily and often there is information that also may assist your trading.
Article topics: EPIC the Oil Algo, Crude Oil FX: $USOIL $WTI, $USO, $UCO, $CL_F, $UWT, $DWT, $ERX, $ERY, $GUSH, $DRIP, Chart, Algorithm, Indicators, Trading Room, Trading Edge, Fibonacci, Indicators, Algo, Targets