Mastering Crude Oil Intra-Day Moves – The Regular USA Market Open Provides Significant Range of Trade and Opportunity for Profitable Day Trades.

This in depth article series looks closer at trade strategies oil traders can use to gain an edge. We are currently coding these specific set-ups to our machine trading software.

Mechanical (human) traders can also learn from this process and use the methods in day trading, trend following and swing trade planning.

We hope to produce one article per week in this series.

Article Structure (Part 1, 2, 3…).

Each article will cover a specific oil trading strategy (set-up) and will include at least 3 parts.

  • Part 1 – Public facing unlocked post that outlines the general trade set-up and generally how the set-up can be traded (in most instances this will include some conventional charting, the chart links for live chart sharing are included in Part 2).
  • Part 2 – Premium member post (locked) that will explain in detail the technical set-up on conventional and algorithmic chart models and how to specifically execute each trade to gain an edge (timing each trade entry, sizing, trimming and adding to positions, technical indicators and more). We will also look at the week to come and how to plan your trading.
  • Part 3 – Each trading strategy will include at least one follow-up article to review real world trading examples from our live oil trading room (live video examples with voice broadcast from our lead trader, chat room logs, live alert screen shots, order sizing, profit and loss and more).

Specifically in this article we look closely at the regular USA equity market open and how to day trade momentum during this important time in crude oil trade.

A List of Common Strategies Used to Day-Trade Crude Oil (Point Form).

There are a number of ways (strategies, methods) a trader can use and refine to gain an edge when trading crude oil. Some examples include and are not limited to;

  • Trend Following / Swing Trading within trending price of oil on various charting time-frames within trading channels. For example, the price of oil has followed a channel on larger time frames (4 hour, daily, weekly etc) since December 24, 2018. The price of oil followed the channel from lows of 42.44 on December 24, 2018 to highs of 66.64 on April 23, 2019 (charted on FX USOIL WTI below). On Friday oil closed 61.69 to end the week. Price has been consolidating / moving sideways over the last week.
  • Price Range Trading. Be prepared to take long trades near oil chart time-frame lows and shorting near the price range highs.
  • Price Reversal Trades (Snap-Back Trades). Crude Oil Intra-Day Sell-offs offer a great opportunity for a reversal day trade long (with significant opportunity for gains intra-day, as do intra-day tops in price). The key is knowing how to trade this set-up.
  • Technical Chart Trading – Conventional and Algorithmic Models. This may include trading Fibonacci levels, VWAP, MACD, Stochastic, Candle Stick Patterns, structured Algorithmic Models and much more.
  • Day Trading Time-of-Day Trend Inflections during market event timing such as when regular equity markets open around the world. Specifically in this article we look at the USA regular equity day market open. There are other examples such as other global market openings, EIA at 10:30 AM Eastern on Wednesday (the crude oil inventory report), API report at 4:30 PM Tuesday, daily 2:30 EST settlement, 6:00 PM futures open and more.
    • crude, oil, sell off, market open, trade

      Tues May 7 crude oil price sells off at regular market open over 80 points to reverse more than 100 points intraday.

  • There are many other examples such as; inventory levels, summer driving season, tanker movement, Geo Political events, market sentiment and more.

Example – Day Trading the Regular Market Open Momentum Strategy. Lets Start with Reviewing Oil Trade From Last Week.

On Monday May 6 (to start the week) crude oil market open momentum set-up sees crude oil trade from 61.24 at 9:27 AM – 61.90 at 10:17 AM, a progressive increase in price from overnight futures session after a late week sell off the week prior. A 66 tick early day move in price.

The opportunity was a 66 tick move on a long side trade at open and then the retrace was as big of a move and then price ran after that through the rest of the regular trading session.

Just the open momentum trade and retrace (lasting just over an hour) was an opportunity for over 100 ticks. That’s a serious opportunity, and it isn’t unusual. In real dollar terms with one contract in CL that equates to a 1,000.00 USD (approximate) gain at market open (if you can learn to trade it predictably).

The one minute oil chart below shows the trade action at market open.

daytrading, crude, oil, strategy, market open

Monday May 6 to start the week crude oil market open momentum has crude oil trade 61.24 – 61.90.

Monday morning was a long trade until 10:17 AM, the momentum started right before open at 9:27 AM, it was (in general on an intra-day time-frame) a follow-through momentum trade from overnight futures the night prior. Sunday night trade melted up after a sell-off late the week prior.

The overnight trend trade strategy will be dealt with in detail in a near future post. For now, the main takeaway here is to follow the intra-day trend until it breaks (generally speaking your bias should be toward trend).

In this instance, price then (after the overnight move and the market open move) went on to trend up through the regular day session for significant gains.

market open, trade, strategy, trend

Monday morning was long crude oil trade follow-through momentum from futures the night before.

How to Trade It – Indications to Confirm Trading Crude Oil Long at Regular Session Open.

Lets look at some conventional charting indicators and then in the follow up Part 2 of this article we will take a close look at our algorithmic model indications that can help confirm direction of trade, sizing, range and more.

  1. Trade In Direction of Intra-day Trend. As above, intra-day trend was for a long bias in oil trade in to open.
  2. Chart Indicators. Conventional chart indicators for day-trading crude oil – Stochastic RSI, MACD, SQZ MOM, Volume, Momentum, Moving Averages, Candle Stick Patterns etc. The one minute chart provides perspective / confirmation of how difficult it is to day trade crude oil with only conventional indicators and conventional charting. The indicators and charting can help, but the indicators (such as Stochastic RSI, MACD, SQZ MOM) can also hinder bias. You’ll notice the selling retrace prior to open that started around 7:00 AM that the Stochastic, MACD and SQZ MOM all confirmed properly that price was selling off (albeit they are trailing indicators) but when price started to trade up they were at best indecisive. And when the regular market open came and price continued to trade up the SQZMOM was turning down, the MACD was indecisive and the Stochastic RSI moved up. Bottom line, it is not easy to use these simple charting indicators. Volume came in progressively in to open – that was a bullish signal and price was upside of all the moving averages (a positive sign for a short term bullish bias in a momentum scenario). All-in-all bias should have been to the long side, but it was no easy trade. Structured charting (conventional and algorithmic) provides a better road map with detailed support and resistance levels so that you can direct your trade accordingly. You can weigh important support and resistance against intra-day trade, sizing and various other decisions. Also of note, the candle sticks did provide some clue, like the long wick prior to selling, the double bottom and top candlesticks and so on. But they only provide clues and should carry little weight on a one minute time-frame.
  3. The Psychology of Round Numbers and Time of Day Trading. When price turned down at around 7:40 AM (nearing that time of day when traders start looking toward the US regular market open) oil was trading at 61.62 (which is just north of 61.50 and doesn’t provide for optimum range at open), optimum range is a full 100 ticks, 40 ticks isn’t consider a great open range and 50 ticks isn’t ideal so “lets sell off to 61.00 for a move to 62.00” is the general mentality of the mass. Yes, it can be this simple. Simple, yet difficult to execute. Then as 9:00 AM nears the price is now nearing 61.00 as it slowly sells down (trading at 61.09) and like magic you get two solid candles and the sell down stops. Trade then struggled with the 200 MA and also as it neared the previous premarket highs as the regular market open neared and then at regular session open price and volume drove the price of oil from 61.41 to 61.89. 61.89 is nearing 62.00 and selling pressure starts. Then price sells off and returns to the session open range once again. This is not an easy premarket, run in to regular market open, market open momentum and topping trade. Experts can trade it (especially with sophisticated models), but not easy even for an expert.

    conventional, crude, oil, daytrading, chart, market open

    Conventional chart indicators for daytrading crude oil, Stochastic, MACD, SQZ MOM, volume, moving averages, candle sticks etc.

  4. Sentiment. After a brief pull back, crude oil then trades from 61.40 – 62.90 on short term geo political and market sentiment. 150 tick move.

    crude oil, daytrading, sentiment

    After a brief pull back, crude oil then trades from 61.40 – 62.90 on trade war sentiment and optimism. 150 tick move.

  5. Range of Trade. Be aware of the near term historical range of trade. You can see on the 30 min chart below that crude oil trade found support at a key horizontal historical support and diagonal trend-line. and ran to a key price range resistance.The chart used is derived from the long term trend line chart shown below this one.

    crude, oil, trading, range

    Crude oil trade found support at a key horizontal historical support and diagonal trend-line. and ran to a key price range resistance.

  6. Trading Price Channels. Below is the long term chart trending channel that has been consistently trading since Dec 24, 2017 and more recently come under pressure.
    crude oil, channel, trend, swing trade

    Swing trading channel trends, price of oil has followed a channel since December 24, 2018. FX USOIL WTI CL_F USO UWT DWT

    Another example is this simple 15 minute channel trend chart. This 15 min oil chart shows the move in Monday trade from the channel support to just over channel resistance.

    crude, oil, channel, chart, trading

    This 15 min oil chart shows the move in Monday trade from the channel support to just over channel resistance.

  7. Chart Structures. All of the various charting provides trading structure clues for range of trade to weigh trade risk sizing against various support and resistance. In Part 2 of this article we look at the algorithmic chart models and other conventional charting for last week and the week to come.

Conclusion.

Having a good handle on the charting for the specific time-frame you are trading is important. Conventional and algorithmic charting can be used. Also having a good understanding of market sentiment, general trade trend direction, market timing and more can help you win.

In Part 2 we dive deeper in to how to day-trade the regular session market open momentum. It will be sent to premium Oil trading bundle and stand alone newsletter members before regular session open Monday morning!

Further Learning:

If you would like to learn more, click here and visit our Crude Oil Trading Academy page for complimentary oil trading knowledge – posts from our top crude oil traders that includes learning systems, blog posts and videos.

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Curtis Melonopoly (@curtmelonopoly) is rated Top 250 Stock exchanges authority, covering also Mathematical finance and Economy of the United States

Article Topics: Day Trading, Crude, Oil, Trading, Futures, Strategy, Signals, USOIL, WTI, CL_F, USO, Market Open, Momentum

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Daytrading Stocks Isn’t Easy, But You Can Increase Your Win Rate When Trading Momentum Stocks Using Technical Analysis Along With A Catalyst Thesis.

In this post I use the market open trade in $ROKU as an example (live raw trading room footage is below) to teach you how to daytrade stocks that have a catalyst (in this case an upgrade in ROKU by a well known market analyst that morning) and using technical analysis to structure the trade (long trade entry point on chart, where to trim the position and where to close the position at key resistance).

My trade was clean, without stress, I alerted the trade live on the live trade alerts feed and traded it live in the trading room. When I alerted the trade I also gave our members a price target for closing the trade.

Hopefully my experience in using technical analysis while daytrading stocks will help you win more and lose less when you lose.

Live Trading Room Raw Video and Transcript Highlights Detailing Trade Entry, Price Target, Trims and Closing Trade.

The video below is the raw live trading room video feed that includes review of various trade set-ups in premarket and market open. The summary of the ROKU trade is below the video with points of reference on timing on video for easy reference.

At 5:55 on video: In premarket I explain to the trading room that ROKU is my primary watch (the others I also reviewed on the video) on the day on the analyst upgrade. ROKU trading up 2% at 74.63 premarket. Over 77.62 is an add (to those already in the swing trade). For the longer term than daytrading 93.93 is a possible price target in a bullish scenario and 87.58 is more likely and 78.00 most likely for the target date on the chart at the time cycle peak.

The points of support and resistance on the charting that I reference follow a process of technical analysis that we use on all of our algorithmic charting.

ROKU trade is following trajectory. Be sure to trim trade positioning in the resistance areas on the chart and add above (or alternatively add at pull backs).

I also how 5 minutes in to open is an important area to watch and how I am cautious Monday mornings, but on this Monday premarket trading was bullish.

At 9:12 on video: Market open at 9:30 Eastern time. ROKU trading 74.72 at open, over 77.62 is a buy / add to any existing swing trade position. Support on ROKU intra day is at 73.15 – 73.20. Buy side coming in at this point and 3 – 4 dollar day trade range possible prior to resistance over head.

At 13:44 on video: Watching the market open first 5 minute candle conclusion. Over high of day (HOD) ROKU could run in to 77.70 price target. At this point in the trading session I explain that I may run the trade with the market to the price target. Trading 75.65 intra-day looking for 76.00 for a long entry for daytrade now.

At 14:41 on video: At this point I alert that I am long ROKU at 76.00 with a tight stop bias with price target for ROKU daytrade of 77.50. I would trim heavy in to that price target and possibly add above.

At 17:28 on video: Just about triggered an add to my long position in ROKU at 75.82, probably should have. Watch next 5 minute candle completion.

At 18:40 on video: ROKU is strong in to 5 minute candle switch. Now I have a stop at entry 76.00. If it dumps (sells-off) beyond my entry price at 76.00 I may re-enter.

At 21:01 on video: Trimming my position at 50% size at 76.69. Decent little day trade. It’s strong. Nice buys there.

At 25:15 on video: We’re getting pretty close to my price target.

At 25:50 on video: Trimming 25% of position 77.16 – likely early but….

At 27:10 on video: This is going to be an important candle turn. If a daytrade is going to soften (fade) it is likely to do that in to 10:00 AM, so I am watching the 10 minute point candle prior to the turn at the top of the hour at 10:00 AM.

At 28:28 on video: In to the candle turn I am watching the bottom of the candle body close. At candle turn watch for bullish or bearish trade action for a clue of how the next candle is going to trade. At this point ROKU is trading bullish trading near high of day. Looking for trade in next candle to hold the top of the body of the previous candle.

At 29:38 on video: Getting close to price target now it trade 77.29 there. 77.16 closed last 25% of the daytrade in ROKU.

The Catalyst: Analyst Upgrade on ROKU:

“Shares of Roku Inc (NASDAQ:ROKU) gapped up prior to trading on Monday after Needham & Company LLC raised their price target on the stock from $60.00 to $85.00. The stock had previously closed at $71.24, but opened at $73.03. Needham & Company LLC currently has a buy rating on the stock. Roku shares last traded at $76.48, with a volume of 8448678 shares”.

Article Here: Shares of ROKU Gap Up After Analyst Upgrade.

The Original Alert That Put ROKU on Watch for a Trade for our Members:

Below is a screen shot of the original trade alert posted on the swing trading alert feed (a copy was also posted to our daytrading alert feed on Twitter) that ROKU was on watch with a time cycle peak nearing (if you need to learn how to chart and/or trade time cycles reach out for some trade coaching, get access to trade coaching boot camp videos or spend some time in our live trading room).

It is important to note here that with the alert we also posted the link to the live chart on Trading View. This is important when you are harnessing your trade thesis in technical analysis, our members do not have to do the charting on their own, we provide that service as part of the platform.

Another important note is that when we are alerting day trades or swing trades for equities or commodity, crypto or currency trades… in most instances our members already have the technical charting models from previous analysis done for members in previous trade alerts or newsletters etc. 

ROKU (ROKU) near short term time cycle, on watch for a daytrade and possibly swing long in to timing $ROKU #daytrading #tradealerts

https://www.tradingview.com/chart/ROKU/d1aJRCLI-ROKU-ROKU-near-short-term-time-cycle-on-watch-for-a-daytrade/

Daytrading, tradealerts, ROKU, technical, analysis

ROKU (ROKU) near short term time cycle, on watch for a daytrade and possibly swing long in to timing $ROKU #daytrading #tradealerts

Day Trading Alert Feed.

Below are the screen shots for the actual trade entry, trimming the trade, where the stop on my trade was set and the price target for the trade on the day.

daytrade, entry, trade, alert

Long $ROKU starter tight 76.00. Daytrading room live trade alert feed screen shot.

live alert, ROKU, stop

Stop set at entry price, would likely re-enter if it hits $ROKU – trade price target on day is 77.50. Live alert.

trim, position, daytrading, alert, ROKU

trim half 76.69 $ROKU. daytrade alert

day trade, alert, trim position

Trim 25% 77.16 holding 25% yet $ROKU. daytrading alert feed screen shot

closed, position, trade, alert, daytrade

Closed last 25% 77.16 $ROKU. trading alerts

Day Trading Chat Room

And below is the screen shot of the trade alert in the daytrading chat room on Discord.

Long $ROKU starter tight 76.00
Stop set at entry, would likely re-enter if it hits $ROKU – PT on day is 77.50
trim half 76.69
Trim 25% 77.16 holding 25% yet $ROKU
Closed last 25% 77.16 $ROKU
daytrading, chat room

Screen shot of daytrading chat room on Discord for ROKU trade entries #daytrading #chatroom

If you have any questions about the trade alert detailed in this article reach out! You can get me on email info@compoundtrading.com or private message me on any of my social media accounts.

Trade safe and cut losers fast!

Curt

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Article Topics: daytrading, learn to trade, momentum, stocks, technical analysis, ROKU, trade alerts, catalyst