Monday Jan 23, 2017 EPIC the Oil Algo Oil Report (Member Edition). FX: $USOIL $WTIC – $USO $CL_F $UWT $DWT $UCO $SCO $ERX $ERY $GUSH $DRIP
Welcome to my new FX: $USOIL $WTI oil trade report. My name is EPIC the Oil Algo.
NOTICES:
Big News Below Members! Time / Price Cycle has 92% chance of terminating before Tues 4:30 to upside trend! We cannot confirm this trend change until Wednesday at 10:30 AM as 100% – so trade cautiously optimistic.
NEW SERVICE OPTIONS: We now also offer a stand-alone trading room option vs. bundle (incl. trading room, premarket newsletter, alerts). Plans from $1.22 per day w/promo code.
NEW SERVICE OPTIONS: EPIC the Oil Algo now has an Oil Report only option vs. bundle w/ 24 hr trading room. Plans from $4.10 per day w/promo code.
MUST READ: There is a feature blog post at this link, “Why our Stock Algorithms are Different than Most“. If you are viewing our algorithmic model charting it is a must read.
MULTI-USERS: Institutional / commercial platform now available.
PATENT PHASE: 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.
ACCESS: My proprietary services transitioned recently from public inaugural to subscriber only access. All rates for existing members for all service prices (including price increases) 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 the 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 and this blog.
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 – all not shown on chart at any given time) – 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 with the primary goal being probabilities. I am not a high frequency or bot type algorithm – I am represented on and used on a traditional trading chart as one would normally use as a probability indicator. The goal is to provide our trader’s with 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 (both intra-day and as a swing trader or investor). This work, and 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. Questions to; [email protected], message our lead trader on Twitter, or message a lead trader privately in the trade room.
EVERY CALL WE MAKE, EVERY PUBLIC INTERACTION, REPRESENTATION OF TRADE (ON EVERY VENUE) IS VIDEO RECORDED (TRADING ROOM), ON SOCIAL MEDIA OR ON BLOG / WEBSITE TIME-STAMPED FOR PERMANENT RECORD AND ABSOLUTE TRANSPARENCY. PLEASE ALSO REFER TO OUR PUBLIC DISCLOSURE https://compoundtrading.com/disclosure-disclaimer/.
FX: $USOIL $WTI Observations:
Below is the link for the live EPIC the Oil Algo Live Trading Chart for Monday Jan 23, 2017.
https://www.tradingview.com/chart/USOIL/YgAk8s8a-EPIC-the-Oil-Algo-Member-Chart-USOIL-WTI/
Intra-day Crude Oil Trading Range: At time of writing FX $USOIL $WTI is trading at 53.28 at 9:38 PM ET Jan 22, 2016. Some thoughts with respect to traditional charting that may help advance the trading edge:
Per previous;
As mentioned above my algorithm has calculated a 92% chance that a time/price cycle is terminating at latest Tuesday next week at 4:30 to the upside. The new algo targets are in red circles (follow red dotted alpha algo lines for targets not represented on chart). Remember that the Friday targets are not as probable as Tues and Wed each week. The purple lines and arrow pointing to one are horizontal support and resistance (that are not as important as the blue diagonal trend-lines and red dotted alpha trend-lines). Use the purple lines for intra trade reference only. More recently the yellow lines (which are significant horizontal support and resistance from other time price cycles) are not holding price action and the diagonal blue trendlines are acting as alpha. Note the blue diagonal trend-line price is currently using as support – this is critical. Our traders will be trading this as support while it holds. Also, above (off chart) there is a very significant downtrending diagonal trendline (blue) that is very thick (means it comes from previous time cycles) and it is at 56.35 intra-day but is trending down so be careful (this was previously pointed out in reports that I have left inserted in this report further down). That overhead diagonal trendline our traders will use as resistance in their trading. There are two alpha algo lines in this time price cycle and they are represented on the chart – the algo targets run along them. Target probabilities are listed below.
Current observations (represented in two charts below):
There is a new alpha algo line added to this chart FYI. Algo targets updated below also.
The recent test of the diagonal trendline (blue arrow) is significant – this is considered primary support. It will hold support more than 70% of the time.
There is a significant probability of upside resistance (yellow arrow) test coming. This has been tested / breached to upside once in recent trade (on Jan 3) and it did not hold.
The white arrows (dotted white lines) represent your current trading range. Although trade has been sideways in a range for a number of weeks the recent price action is giving our algorithm significant indication of upside trend continuation (which of course has to be confirmed).
In the second chart below there is a blue arrow pointing out significant resistance with a downtrending diagonal trendline (blue). This is a significant resistance – considered the most significant possible. The probability of price action breaking through to upside is less than 10%. If trade does break to upside and holds on back-test then a new trend is established with a probability of more than 90%. A trendline of its significance is rarely tested. Our traders will short oil if and when price action nears this trendline and of course if breached to upside our traders will go long oil.
On Jan 9, 2017 the price of crude dropped out of upward channel and has not regained the resistance upside to establish new uptrend at 54.32 (yellow arrow) since. As above we expect a test very soon. When / if trade is to upside of this resistance our traders will long oil.
Support breached at diagonal trendline (blue arrow) with back test confirmed would be very bearish should this occur. My algorithm shows a low probability of this occurring before upside primary resistance areas are tested first.
Confirmation of the high probability of upside momentum will occur based on targets Tuesday at 4:30 PM and Wednesday at 10:30 AM. Stay tuned for updates around these important target times this week.
Current trade at 53.28 Crude algo intra work sheet 933 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
Significant resistance at 56.35. Crude algo intra work sheet 933 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
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).
See notes ad charts above for swing trade ranges.
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.
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!
Per previous;
I am going to leave the commentary below in my reports for the short-term to show and be sure (if crude price rises) that traders are aware of the significant resistance over-head, but it also serves as a reminder (lesson) that when price is getting within significant resistance such as below that significant downdrafts in price action are likely.
The diagonal trend-line in this chart is very important. In fact, so much so that our traders will aggressively short at these trend-lines (with tight stops of course) – because this is a trend-line from another time-cycle – a significant trend-line. Keep in mind, that with charting, especially when bringing trend-lines in from many previous time-cycles such as this that it won’t be exactly on the penny – so watch close here.
There is also a symmetrical resistance and support line below it (yellow). If crude trade rises above this trend-line you can expect at least nine times out of ten a new break-out in crude oil trading price.
All recent major up-trends in crude trading (last two years) have used these diagonal trendlines lines as support (or alternatively as resistance sending crude down in a new trading trend lower). Very, very important line to watch.
56.93 is significant resistance with diagonal trend-line. Crude algo intra work sheet 758 PM Jan 2, 17 FX $USOIL $WTI #OIL $USO $UWT $DWT $CL_F #OOTT #Algo
56.93 is significant resistance with diagonal trend-line. Crude algo intra work sheet 758 PM Jan 2, 17 FX $USOIL $WTI #OIL $USO $UWT $DWT $CL_F #OOTT #Algo
Price Action with 20, 50, 100, 200 MA
It is wise to study how the 20, 50, 100, 200 MA trade on each time-frame before trading oil related instruments (see previous posts).
Fibonacci Levels:
Below are the Fibonacci levels to watch with crude oil trade.
Watch the 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.
Fibonacci levels. Crude algo intra work sheet 1138 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
Fibonacci levels. Crude algo intra work sheet 1138 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
Live oil chart with Fibonacci Levels:
https://www.tradingview.com/chart/USOIL/FrxbwAK6-Fibonacci-levels-Crude-algo-intra-work-sheet-1138-PM-Jan-22-FX/
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.
Advanced Charting:
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.
You will see a lot of noise on the charts over the next few weeks (algorithmic calculations of various types). Try and ignore for now.
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 indications)… 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.
Time price cycle terminations. Crude algo intra work sheet 1146 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
The chart below shows the three time price cycle terminations coming soon (orange arrows). All of which are not significant but significant enough to note and be aware of.
Time price cycle terminations. Crude algo intra work sheet 1146 PM Jan 22 FX $USOIL $WTIC #OIL $CL_F CL $USO $UCO $SCO $UWT $DWT #OOTT
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.
Current Alpha Algo Targets (Red circles):
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.
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.
Current Algo Targets Should Time / Price Cycle Change Confirm:
Tuesday Jan 24 EST 4:30 – 52.88 (56%), 53.47 (59%), 54.94 (11%)
Wednesday Jan 25 EST 10:30 – 53.03 (51%), 53.58 (54%), 55.12 (7%)
Friday Jan 27 EST 13:00 – 53.46 (14%), 53.90 (19%), 55.50 (2%) – Friday Targets are least Predictable.
Oil Intra-Day Algo Trading Quadrants:
Processing now for release soon (you are seeing the beginning of them above in charts now) – I don’t think there are any real tight crude related snipers beyond our lead trader right now anyway – but nonetheless, we are getting these out – they take a lot of data processing to say the least. We’re almost there.
Indicator Methods:
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).
Conclusion:
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 again, if you struggle to know how to use these indicators as a trader’s edge, it is recommended (if you have earnestly reviewed all of our documentation first) 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” soon, but it will be simply be a recap (consolidation) of instructions in this post, from my Twitter feed, and previously published information on our blog and website. You can also send specific questions to our email inbox at [email protected] – 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. Trade room transcripts (for example) may review topics pertinent to 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, Fibonacci, Algo
