In One Hour of Crude Oil Trade Wednesday Afternoon (After EIA Reported Inventories) Price Ran Up 134 Ticks, And We Knew The Bottom.

Below Are Tips for Intra-Day Reversal Trading Strategies and How To Determine Price Targets For Locating Bottom of Day Price.

Nail the bottoms in crude oil and you have the single most profitable strategy there is in trading crude oil. The intra-day reversals and subsequent run up in price move fast. Intra-day reversals can be precisely executed with an extremely high win rate (our v3 EPIC win rate is well over 90%) and you can build a profitable trading career with that one set-up.

The reversal trade in crude oil trade in this report and video is a real-world example from our oil trading room.

The intra-day oil futures short selling strategy / sequence from yesterday’s article concludes here also (see below).

We pick up the story in this article with us closing the winning oil short position / sequence from the Tuesday (selling in to the Trump news) and then on Wednesday (after the weekly EIA report) turning our focus toward pin-pointing likely oil trade reversal areas intra-day to possibly catch a bullish run-up trend intra-day after the sell-off.

The strategy worked. We caught the bottom near to the penny and we had the price target for the high of day within pennies also. Execution wasn’t perfect, but we are winning consistently and the v3 software is performing over expectation.

Exactly how we determined the most likely bottom area on the day and high of day price target is in the raw video feed from the live trading room (see below) and in this quick post.

With the limited time I have available to write this article in premarket, I will provide some of the tips you can use to locate bottoms for your daytrading strategies. For more on this subject, refer to the live trading room videos on YouTube and/or other articles we have published on this topic.

If there is one area of crude oil trade we know well, it is how to locate intra-day bottoms (low price of day) in advance to assist with a traders day trade strategy. The v3 EPIC Machine Trade Software has an extremely high success rate in this specific area of oil trade analysis.

Before digging in to this article, please read the introductory article for this series here: How Oil Day Traders Can Learn to Trade Better Using Success & Failure of Our Trading Development Team – Part 1.

The articles in this series are sent direct to the mailing list – so be sure to register now,  click here.

Recent Trading Profit/Loss Results v3 EPIC Oil Machine Trading Software Sample 100K Account:

For Aug 9, 2019: v3 Profit & Loss: Daily +$995 YTD +$8,526 Projected $94,306 or 94% Per Annum. Oil Machine Trade 100k Account (v4 period excluded) #OOTT $CL_F $WTI $USO #MachineTrading #OilTradeAlerts

Wednesday’s Live Oil Trading Room Session.

Please note:

  • When we alert 1/10 that means (for example) on an account of 100,000.00 that would normally execute a trade size of maximum 10 contracts, 1/10 size then represents 1 contract. We use a 100k account for our sample set for simplicity.
  • Trades and the strategy therein are alerted to a live trading room by voice (by a leader trader) and published as time allows to an oil trading alert feed on Twitter and in Discord private member server.

First I will share the guidance from the oil trading room server, alert feeds etc and then I’ll give you some pointers on how to locate bottoms in trade.

The raw video from the oil trading room provides significantly more detailed guidance.

Chart from oil trading room below highlights the alerted close of last short sell position in crude oil for Tuesdays trading session.

short sell, crude oil, trading room

Chart from oil trading room highlights the alerted close of last short sell position in crude oil for Tuesdays trading session.

Image of oil trading alert private member feed on Twitter that shows covering the last short sell on crude oil trade.

JeremyToday at 6:11 AM
Buy / cover 1/10 56.18 hold 0 but still in sequence to sell
Software well green.

oil trade alert

Image of oil trading alert private member feed on Twitter that shows covering the last short sell on crude oil trade.

The New Trading Day Starts: Oil trading room day trades alerted with price targets for reversal at intraday bottom and top.

Green arrows on chart are oil contract buys and red arrows sells, white are price targets for low and high alerted prior to trade.

oil trading room, alerts, trades, alerts

Oil trading room day trades alerted with price targets for reversal at intraday bottom and top.

Screen shot image of crude oil trading chat room alerting initial buys at reversal test area, time cycle, price targets for oil intra-day

Curt MelonopolyYesterday at 11:33 AM
Software started buying 54.32’s HF tests
It sold in to the 2/10 in to 54.50s, its in a range program now

Curt MelonopolyYesterday at 11:56 AM

At this point we’re looking for a 12:45 bottom, time cycle 11:15 – 2:15, trading 54.14
machines are here fyi
Preferred buys 53.93 for 54.93 PT bounce and 55.41 possible. Trading 54.29. Quoted as FX USOIL WTI
Preferred buy price target 12:42:30 EST at 53.93

oil trade room, alerts, trades

Screen shot image of crude oil trading chat room alerting initial buys at reversal test area, time cycle, price targets for oil intraday

Screen image from oil trading room of machine trade software nailing the bottom reversal intraday in crude oil trade and alerts.

Curt MelonopolyYesterday at 1:09 PM
Long 54.13 1/10 tight stops

Curt MelonopolyYesterday at 1:19 PM
Long 2/10 add 53.96, sell 1/10 54.01, hold 2
Sold in to 54.25 hold 0

Gotta teach it to hold some.

machine trading, crude, oil, alerts

Screen image from oil trading room of machine trade software nailing the bottom reversal intraday in crude oil trade and alerts.

Screen image from oil trading room showing first price target previously alerted being hit.

two ticks away hit 53.95 – “Preferred buy price target 12:42:30 EST at 53.93”
2 ticks off price target in that first burst

“Preferred buys 53.93 for 54.93 PT bounce and 55.41 possible. “

price targets, alert, oil, trading room

Screen image from oil trading room showing first price target previously alerted being hit.

Guidance in oil trading room lead trader alerting members to watch for a possible channel of trade coming.

Curt MelonopolyYesterday at 1:50 PM
possible channel

Curt MelonopolyYesterday at 2:25 PM
right in to top of channel beauty

trading room, oil, guidance

Guidance in oil trading room lead trader alerting members to watch for a possible channel of trade coming.

Crude oil price then goes on to near the 2nd price target from previous alert. Image of trading room.

Curt MelonopolyYesterday at 2:36 PM
Hit 55.30 dangerously close now to 2nd price target, nice move today on that snap back reversal trade intraday

I will be on break until 6:00 PM, Jeremy will alert any trades, a tad overloaded with paperwork. Have a good one y’all.

crude oil, price target, alerts, trading room

Crude oil price then goes on to near the 2nd price target from previous alert. Image of trading room.

So, The Question Then Is, How Did We Nail The Bottom Price On The Day? And How Is It That We Nail That Trade Day After Day With Well Over 90% Win Rate? Below Are My Tips:

What I Can’t Tell You (Top Secret):

  1. We are developing proprietary crude oil order flow AI software platform that is getting really accurate (IDENT). This software runs tandem to the EPIC Oil Trade Machine software that executes the trades. Sovoron then uses that data. Our trading service members and clients of SOVORON receive the benefit but I can’t tell you how it works, ever.
  2. We have been developing algorithmic chart models for crude oil trade on all time-frames for nearly three years now, this helps a lot in determining areas (range) of oil trade and turn-around (reversal, nap-back) trades. The oil algorithmic chart models are available to our trade service members in reports that are regularly distributed.
  3. We have taken the algorithmic chart models and coded them to machine trade software. The software then alerts myself (and team), our oil trading room traders, our trading service members and Sovoron to trades setting up and trade executions. I can’t tell you exactly how the software is coded beyond that, but I can say that it has over 4700 rules. The v3 software is executing a win rate well over 90%. You can learn how to trade on the information it uses by signing on to our newsletters, alerts and/or attend the live trading room.

What I Can Tell You:

Below are just a few tips I can provide with the limited time I have, but I can say that if you study our methods you can duplicate our win rate. We’re still learning and we’re teaching our trading service members and the recently launched AI software to trade oil (the software will obviously be much better than us soon enough), but I think you get the point. There is a process here, you just have to put in the work and learn.

  1. Conventional Crude Oil Charts are critical for your trading strategy. Our software uses them, I (our team) use them and you should be using them daily. All time frames are important so that you know the key areas of support and resistance for your day trading plan. Trend-lines on all times frames should be at your immediate access when trading oil.
  2. Algorithmic Crude Oil Chart Models refine  and compliment conventional charting. They help you see what you wouldn’t otherwise be able to see. They also help you know better what the large machine liquidity in the oil markets are likely to do with each support and resistance area. Algorithmic models also provide you with a future forward GPS. For example, you will know where possible channels are before they appear from trade. In summary, algorithmic chart models provide you with the lay of the land – the structure of trade on various time-frames. It is this structure that wide market machine liquidity is programmed to compete within.
  3. When Sizing Your Intra-day Reversal Trade be sure you can release some size almost immediately so that if the trade then goes against you (after the initial spike) then you have some “room” for your stops. In other words, if price spikes 10 ticks after you enter a 3 contract trade then close 1 contract and then if price returns to your buy then decide if you want to release another and then if it goes 10 ticks under your buy release the last. In that scenario you have lost zero. So if you get good at this trade set up then you have a near zero risk trading edge IF YOU DON’T HOLD LOSERS. Where we are working with our software right now is with it holding some as price reversal continues. We have mastered the bottom reversals and now we’re training the software to hold some size and ride some profit. It’s complicated to explain but I’m sure you get the point.
  4. Technically watch for increasing volume at possible lows. Know your support and resistance on every time frame, your trend lines are key as are algorithmic chart model structures. Get to know your important times of day, times of week, time-cycles, events etc. Also, if you can enter after a flash down (a quick spike down in to your intended support) this is best. This allows for some range on the snap-back reversal and if the trade fails you can exit.
  5. And finally, DO NOT HOLD BAGS. Losing trades can be tough to recover. Our v3 software may hold some (very small) but only because it can locate the next bottom and hit it long and have a small loser right side up very quickly. If intra-day trade leaves the intra-day structure our v3 software will close the small position for a loss. This by the way is its edge and the primary reason the v3 EPIC Oil Trading Machine Software very rarely loses a trade.

Bottom Line:

  1. We obviously know how to locate intra-day bottoms in oil price and most often also tops (although top price of day targets are more difficult as is trading oil short from the top – bottom reversals are much easier to trade). The everyday oil trader can learn our methods and find a high win rate with an excellent ROI. Reviewing our videos on YouTube, reviewing our written blog posts and signing on with us will go a long way to you learning this trading edge. This becomes a really easy trading strategy when you have done your study, have the right indicators in front of you when trading, receive some experienced guidance when needed and have our alerts / guidance.
  2. As our software better learns how to hold profits and trail out of the intra-day reversal trades the win rate will remain the same but the ROI of the software graph will likely go parabolic from about 90% per annum (see chart) to a vertical ROI graph – we aren’t far away from this now.
  3. The majority (we estimate now to be close to 90%) of order flow in the oil markets is now machine traded, if you aren’t at least learning how they trade then you’re just not awake to the profitable world it offers.Between 2012 and 2016, almost two-thirds of crude oil contracts traded on CME’s futures exchange were automated, up from 54 per cent, according to a 2017 study by the US Commodity Futures Trading Commission. https://www.ft.com/content/8cc7f5d4-59ca-11e8-b8b2-d6ceb45fa9d0
  4. Dig in to the links below at the bottom of this article if you want to investigate how our development process can help you profit in the oil trading markets.

Live Oil Trading Room Video.

Please note: The video below is a raw feed only of the oil trading room for the whole day-trading session (we run the live video feed from 7am to 5pm EST). To listen to comments by the lead trader that contain specifics to his/her thinking as he/she and/or the software are trading and sending out alerts, look at the time stamp on the oil trade alert, chart, trading room screen capture image etc in this or any other report and correlate that to the video and go to that part of the video.

On Wednesday I was fairly active on mic around trading times with trade set ups and execution of trades.

If you are struggling with your trading and need some trade coaching go to our website and register for a minimum 3 hours.

Email me as needed compoundtradingofficial@gmail.com and remember that I am doing an oil trading information webinar once a week for now on (covering our software status and trading techniques) so email me if you would like to attend this next one – you will need a special link and access code to attend.

Thanks,

Curt

Other Reading:

NYMEX WTI Light Sweet Crude Oil futures (ticker symbol CL), the world’s most liquid and actively traded crude oil contract, is the most efficient way to trade today’s global oil markets. https://www.cmegroup.com/trading/why-futures/welcome-to-nymex-wti-light-sweet-crude-oil-futures.html

Further Learning:

Learning to Trade Crude Oil is Like No Other. At this link you will find select articles from our oil traders real life day-to-day experience in our oil trading room. Crude Oil Trading Academy : Learn to Trade Oil

Subscribe to Oil Trading Platform:

Standalone Oil Algorithm Newsletter (member charting sent out weekly).

Real-Time Oil Trading Alerts (Private Twitter feed).

Oil Trading Room / Algorithm Newsletter / Alert Bundle (includes weekly newsletter, trading room, charting and real-time trading alerts on Twitter).

Commercial / Institutional Multi User License (for professional trading groups).

One-on-One Trade Coaching (Via Skype or in person).

Company News:

Oil Machine Trade Software Development Update – v4 vs v3.

SOVORON™ Selects Compound Trading Group Machine Learning Data | Media Release

Free Mailing List(s):

Join Email List for Free Trade Charting Trade Set-ups, Deals, Podcasts and Public Webinars.

Public Chat:

Visit our Free Public Chat Room on Discord.

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Article Topics; crude oil, tips, reversals, bottoms, trading, strategies, daytrading, machine trading, $CL_F, $USOIL, $WTI, $USO, CL, how to trade, alerts, trading room


How to Day Trade Crude Oil – Price Range (Low & Highs), Trends / Channels, Reversals, Sizing (Trims, Adds, Stops) and Timing – Crude Oil Day Trading Strategy (Part 2 Premium).

Introduction:

This article is part 2 of the previous public post, “How to Know & How We Alerted (In Advance) Crude Oil Intra-Day Bottom Price, Day High, Trend (PT 1)“.

I apologize for the detail in these posts, but the reality is that it takes a detailed systematic rules-based process to day trade crude oil.

You want to win in a way that provides the highest probability of win rate and return? It takes skill. Skill requires knowledge and refinement of execution.

We have been developing machine trade software for some time – this has taught us a lot, and I’m not talking about a simple trading bot kind of development.

The process of development had us trading and back testing in every time frame, every structure, every set up, every range, sequence within all, trend, order flow and more.

As we learned we shared much of this information with our clients (yes learning, after 30 years of experience).

You can read a recent client memo that explains the multi-month process we embarked on, where we are at now with development and where we are going in future here, “Crude Oil Machine Trade Software Complete | Rule-Set Strategies, Alerts, Accounts Traded, What’s Next?

The goal now is to simplify the processes (the most probable crude oil trading set-ups) and provide our clients with the most simple, clear, systematic how-to documents, videos, coaching, trading room guidance etc so that traders can duplicate what we are doing to achieve success in day to day trade.

In short, we have coded our machine trade software to trade only that which we know has the highest probability of win rate success and we will endeavor to share this with our community.

We know where we can and where we cannot win, and going forward we will only be trading that which we know with high probability that we will win.

Our machine trading software will now consistently improve its win rate (we are not experimenting going forward, we are done).

Our machine trading software will now consistently improve its return rate and over all success.

We expect this process to take about 90 trading days. After this, we expect to only be doing maintenance to the software.

So how do you duplicate what we learned? See below.

General Requirements of a Successful Oil Day Trader:

Strategy is Mandatory: When you sit down to day trade crude oil futures you need a clear plan.

  • Your trading plan has to be based in reality.
  • Reality is the nature of the instrument you are trading.
  • You can have all the plans you want, but if you do not know the nature of the instrument you are trading, you will lose.

Trading Edge: This article is a study of the nature of crude oil intra-day price action and how to execute trades so that you maintain the highest probability of success – your trading strategy edge.

  • When you acquire a trading edge for a specific instrument of trade then you become profitable. This requires knowing the nature of the instrument better than your competition, refining your process and then executing the process without thinking.
  • This is not unlike a professional tennis, football, hockey or whatever player. Think warrior, think training, think skills.You have to be able to execute – pull the trigger, without thinking. After all, your primary competitors are now machines, more specifically many are AI, and they don’t hesitate to pull the trigger.

Nature of the Instrument of Trade and Associated Returns: Crude oil embodies one of the most complicated (abstract) natures of trade (structure of instrument) – but also possesses one of the most profitable opportunities for a trader.

  • The structures of trade on various time-frames for crude oil are complicated but at the same time they are not, they are logical, mathematical, geometric and follow a natural order. You just need to know what that order / structure is and what the nature of trade is within each time-frame of structure.
  • Oil trading provides significant return potential because it is so structured (yet complicated for the casual observer or trader). Trade set-ups can be repeated over and over again on each time-frame daily, weekly, monthly and so on.
  • Crude oil can be traded with CL futures contracts, ETN’s on the regular equity markets (leveraged instruments of trade such as DWT and UWT) and with various other FX products and instruments. Most of which provide opportunity for leverage.

Welcome to the World Cup: I often say that if you can trade crude oil successfully, you can trade anything.

  • I am instantly bored day trading equities and swing trading equities, commodities etc now that I’ve been schooled by the best of the best AI’s and traders in crude oil futures. I still day and swing trade equities (always will), but it is like going back to grade school.

Success! So You’re an Expert Oil Trader Now.

  • An expert oil trader knows (with weighted probability) when and where to enter and exit trades (when and where to size in to his/her entries), when and where the trade should be trimmed or see adds, what the likely price trend is to be (on various time-frames), when and where price trend is likely to reverse and how to allow for appropriate variance on stops.
  • In short, an expert oil trade understands when structured timing is or is most likely to be in play for the most predictable trades and what each time-frame will look like (the nature of the structure within each time-frame). Various market timing becomes key.

Oh Wait: Fundamentals are Required.

  • Add to all the above requirements… an expert oil trader also needs a keen understanding of fundamental and geopolitical frame-works.

The Competition: Welcome to the Matrix.

  • The majority of crude oil is now traded by machine (and much of that is now sophisticated AI, and I’m not talking simple bots that you see advertised for retail traders in FX markets).
  • In short, the goal is to know what the machines (that control the most liquidity) are doing, how they trade, what decisions they are executing their trades to, etc.
  • If you know what the machines are doing you can then join the ride. You can be (with high probability) on the right side of the trade.

Master the above requirements and you then have some of the primary skills that make for a successful oil trader.

High Priority Signals / Associated Skills Needed For A Successful Crude Oil Day Trading Strategy:

Below I list in point form the signals you will need to know and then need to execute with precision. It is important to note here that the points below intertwine – in other words, the various points relate to each other symbiotically, they affect each other and become the nature of trade.

For simplicity I numbered them to assist with your study, your focus. You can use this like a check-list before entering a trade or before starting your day. Or, if you lost a trade (your discipline is off) you can review the numbered list below before taking another trade.

The information will provide you clues as to how the machine software is now coded, coded specifically to the highest probability win rate and being tweaked over the next 90 days to increase size and return to point of losing and then will be trimmed back and then idle.

The information below will provide a manual human trader the highest opportunity of success if you focus on the study needed and the repetitive training to then execute trades without thinking (with limited emotion).

The conventional and algorithmic charting required to execute the set-ups explained below are included in our client oil trading bundle (newsletters, alerts, trading room).

# 1 – Range of Trade.

Knowing the trading range is really critical for your trading strategy. Having a plan for the most probable high & low area of trade for the time-frame you are going to trade is paramount. This is accomplished with conventional and algorithmic charting.

This is the range on charting time-frames if you draw a simple horizontal line at top and bottom. Approximately where is the range?

Your positioning bias is then to be short at the top of the range and long at the bottom of the range (with many other considerations that make up your position size, where you trickle out, whether you trade the ebb and flow within the range, your stops and more).

If the over all trend is bullish you won’t size in as much on the short side of the upper range of trade on the time frame you are trading and the opposite is true if the over all trend is bearish.

It may be that you 1. enter your trade at the range limits and don’t touch the trade and exit at the opposite range. Or, 2. you may trickle out size as the trade progresses. Or, 3. you may (expert level here) even trade the ebb and flow of the range.

And then boom! you catch the trend reversal and repeat the process… over and over. Some days many times a day. This is the opportunity for an oil trader that equity traders don’t have available to them.

  • Intra-Day Trading Range. Right Now What is the Trading Range? Where is Trade Likely To Trend Next When it Reverses?
    • What is the playing field today? Knowing where the range of trade is right now on the charting, where it has been recently, where it is likely to be near future. What is the current range of trade? What is the likely trend going forward?
  • Wider Trading Range Time-Frames.
    • Knowing where the trading range is intra-day is important but also know where it has been on a wider time frame is also important to know. This is important because if trade leaves the current range you then know where the next range is likely to be.
    • Why is it important to know the trading range on various time-frames and where the trend is likely to reverse?
      • Support and Resistance. The key support and resistance areas on intra-day and wider trading ranges become key for decisions in the trade range itself – areas for entry, exits, adds, trims, sizing and more.
      • Precise Entry and Exit. Knowing the range of trade is important for high probability trade entries and exits and this can significantly increase your return on each trade (if you can enter and exit with precision).
      • Managing Stops and Sizing. Range of trade is also important for sizing your initial trade entry, trimming your trade size and / or adding to your trade. The idea here is to enter trades at the outside edges of the most probable areas / range of trade, weighing your entry size and stops more so when you are trading the most probable trend of trade and it is also important for knowing when to trickle out / trim positions as the range trade progresses.
  • Using Conventional Charting and Algorithmic Models to Determine Range.
    • Check your conventional charting on various time-frames (1 minute, 5 minute, 15 minute, 30 minute, 4 hour, daily, weekly and monthly) and do not ignore the algorithmic models (these are where the machines will bias sizing).
    • Generally an oil day trader is trading the range of the 1 minute through to 4 hour hour. I most often am using the 1, 5, 15 and 30 minute structured algorithmic models.
    • When you have an understanding of the range frame-work on conventional and algorithmic charting you are now prepared with your range trading bias for the day. You are also ready for the most probable areas of trend reversal.

# 2 Trend of Trade and Channels.

Where are the general trends of trade on various time-frames? Is price trending up or down? This can be difficult to assess when you consider the nature of crude oil – this is why the static range (as above in #1) is so important. Also, are there channels of trade in play on various time-frames?

  • Price Trends. Know What the Current Trend Is.
    • Is there a channel of trade or a range to work with? Are there channel set-ups within various time-frames of charting and times of day or week that tend to repeat?
  • Reversals. Where and when is the trend likely to end / reverse.
    • Key support and resistance areas on various time frames. Here again, range of trade, trend and trading channels.
    • Algorithmic structured time cycles. There are time cycles on each algorithmic model. You need to know these well. The machines are coded to bias trades at these time cycles. This is critical.
    • Time of day or week considerations for various markets in play or events such as EIA and daily settlement for example) and what the likely trend will be next for the continuation of your trading plan.

# 3 – Time of Day.

Time of day is critical. You need to bias your trade size, your expectation of key support and resistance being respected, your expectation of trends finding continuation etc.

  • Early futures trade. Early futures trade is usually sloppy unless there is a geopolitical event. It usually has near zero range. It usually does not respect any of the conventional or algorithmic structures on charting. Use extreme caution.
  • As Global Markets Open. As markets in Asia and Europe etc open then trade starts to get more and more structured. Usually around 3 am Eastern trade become more structured. This can start earlier at around 11:00 PM the night prior but I like to avoid trade until at least 3:00 AM Eastern.
  • The session between 3:00 AM to 7:30 AM (all approximate ranges of time) typically is a session in of itself and a reversal is very possible around 7:30. Quite often if trade has been trending up during this session then the air is slowly let out of the balloon for the hand off that occurs around 8:00 AM for the US day traders.
  • Then around 8:00 AM you will start to see volume increase significantly, especially on the half hour marks leading in to the regular US Market open.
  • At 8:30 AM, 9:00 and 9:30 this is where the trend for the morning session for the regular US market is usually determined.
  • Around 11:00 AM the trend is then consolidated for a further move up in the afternoon session, or sideways range bound trade or a reversal. The opposite of course is true.
  • Prepare for some volatility around settlement at 2:30 PM and around API Tuesday 4:30 and EIA Wednesday at 10:30 AM.
  • Friday afternoons can trend price in a way that is not possible on most days.
  • Many days you will find that late afternoon is a slow melt up, melt down or sideways. Shorting the melt up is foolish.
  • Above are just some examples.

# 4 – Intra Day Time Cycles.

Time cycles have been discussed some above. The basic consideration here is that each algorithmic model (on various time-frames) includes time cycles that are foolish to ignore. The larger the time-frame the more important the time cycle.

  • For example, there is a large time cycle on the weekly model that expired (or peaked) last week. On such a large time cycle a week either way is considered and then trend thereafter becomes weighted heavily in bias of trade.
  • Another example is the 5 minute algorithmic charting model, there are time cycle peaks every 3 hours within a specific structure. These are key to understand for a day trader. Not just where the time cycle peaks are, but the nature of trade around each peak.

The algorithmic reports and the discord member chat room are key for learning how to take advantage of the time cycles.

# 5 – Cut Losses Fast. Using Stop Losses. Sizing.

Crude oil trade is vicious. It can ruin a trader’s confidence fast. It can also destroy a trader’s account.

If you have the rules in place, you know the structure of trade, you are sizing in accordance to your threshold appropriate to your account size then you will be fine. Capital protection is by far one of the most important skills you can acquire.

For my personal account this is critical. This changes somewhat when you know that you can make up the bad trade(s) – you have the skill-set and just have to reset. But until you have the proven experience it is important to protect your capital. This discipline can also be different if you are developing software as in our case (we achieved 63% returns and then lost up to 30% in a month developing the software). But this again is different because (as in our case) when you stop developing and simply deploy software to execute to only trade what is most probable you know it will make up the losses.

But for a human trade executing mechanically (manual trades) the cut losses fast is a critical skill-set. You need to know what trade structure is in play, you need to execute to the outside ranges of that structure and you need to size appropriately. If the structure, the plan goes against you, you then need to close your position fast.

  • Stops should be set in accordance to the time-frame structure in play.
  • Understanding that the machines will hunt stops is critical. This then highlights the necessity to place stops outside that range and consider trading a range of trade with increased sizing as the trade proves itself or size in at inflections of time cycles and increased volume and immediately close if it goes against you.
  • If trading range it is better to consider giving the range room to work itself out. Add to the position as it proves out at the outside of the range and then trickle out / trim your position as it moves through the range.
  • If trading a channel on a day trading time-frame then you should be more static about your entries and exits. More rigid. The channel on lower time frames will typically work or not work. A trading range has much more “give” to the range. The edges of the range are more blurred as the time-frame gets larger and larger.

Real World Trading Examples:

Below are excerpts from Part 1 of this article (in italics) to highlight the points discussed above.

I then also include charting and explanation about how we knew where price would likely bottom on the day and reverse (to provide one example).

Future posts will focus us down on real world examples from the live trading room and we’ll refine each trade set up and trading discipline skill one at a time, over and over again until you are winning at least 80% of your trades and over time you can then increase your trading size and returns.

I will include chart / screen shot (captures) but won’t provide charting links for proprietary algorithmic models in this post, members receive these regularly on email.

Low of Day Price & Reversal Trade Signal / Set Up .

Knowing with high probability where the low or high of day price will likely be is a great skill to have as an oil day trader. It will provide confidence in trade, allow for sizing considerations and so much more. Below is an example from our private oil trading chat discord server, trading room and oil alert feed.

Our traders learn how to set up their strategy, watch for the signals on the charting etc from the newsletter reports, charting updates continually sent out, guidance in the discord chat room, voice broadcast in oil trading room and alerts on the Twitter private feed.

At 10:54 AM I alert the oil trading room (with voice broadcast and charting), the oil chat room (see screen capture image below) and alert to the member Twitter feed (screen shot below) that we are looking at the 50.84 area of FX USOIL WTI for possible long trade (trend reversal) for a possible bottom price area on the day. We trade CL futures but alert on USOIL WTI for consistency between instruments of trade for crude oil.

Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.

oil, trade, alert Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.[/caption]

How Did We Know Where Oil Trade Was Likely to Bottom on The Day?

We have structured models on all time frames. In this instance the EPIC Algorithmic Model on the 30 Minute provided the primary structure. Oil trade was trading down after the EIA numbers were released and we simply looked to the bottom of the current trading quad structure. We then cross reference the structure of support with trading models for larger time-frames and lower time-frames and as price nears the target area we look at time frames on smaller and smaller models.

When price action confirms on the 1 minute model, increasing volume is apparent, the order flow is confirmed (machine liquidity is entering from the markets in to the trade) then we start our trade and/or our machine software begins to trade.

Below is the EPIC Oil Algorithm 30 Minute Model. Many areas of structured support were hit and then price ran up approximately 150 ticks for a complete move from the bottom of the quadrant to the top of the trading quad. Perfect set-up.

The orange arrow is where price hit the machine execution line (where the larger liquidity players normally have machines coded to begin large entries), then trade confirmed above the swing trading wider range indicator on the model (the thick gray horizontal line) and then further confirmed at a considerable historical support (purple horizontal line).

low of day, price, reversal, crude, oil

Determining low of day crude oil price for reversal. Algorithm area of support, swing support, historical support.

Then at 11:54 the price of oil drops in to the area previously alerts, spikes down with a flash and trade reverses. In the oil chat room screen shot below you can see I alerted our long oil trade (machine trade in this instance) in the 50.70s and then the machine trade closed and fired a few other times. This ended up in fact being the low of day in trade. I had alerted that I was looking at the 50.84 area and price hit 50.70s and reversed.

Software fired in there 50.70 s to closing 50.90 s, I didn’t but we’ll see if it holds the range for a bounce.

oil trading room, alert, bottom price, trend reversal area Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.[/caption]

You can also see in the screen shot that I was sharing various chart set-ups to help our traders with their trading strategies for the day so they knew where the structured areas of support, resistance etc were.

Then at 12:07 PM I alerted to the oil trading room by voice broadcast, chat room with charting and on live alert feed that the structure of trade had improved and that we expected that the low of day for trade had in fact been put in confirming a reversal.

improved structure, likely near term low in

oil, trade, alert, price, reversal

Oil trade alert, trading room alert low of day price crude oil reversal trend in play.

Then shortly after 12:00 I alerted (to live trading room, chat room, alert feed) that there was a time cycle peak coming at 2:15 (in other words if you are long on the reversal from the day lows that 2:15 would be the area of time on the day for a high for your price targeting on the trade).

I also gave the resistance levels between where trade was at near the bottom of the trading quad (near the reversal area at bottom) and where we seen the top price target of trade. In other words, if you are long the trade watch for the 20 MA on the 5 minute chart above and the mid quad (mid channel) resistance on the 30 minute EPIC model chart.

2:15 time cycle should be the top on any retrace up on the day
20 MA on 5 min overhead
2:15 PM time cycle most bullish scenario we have is 51.90 (mid channel on EPIC quad) trading 51.32
body of 30 min candle at machine line

Then after the resistance areas are overcome in uptrend trade on the day at 1:20 PM (in advance of the 2:15 time cycle peak) I alert in more detail the various price target areas that represent various model charts on different time-frames so that our traders know exactly what levels to watch as price nears both time and region of trade for our trending price targets for the day trade.

Resistance we are watching intra 51.86 mid channel EPIC, 52.14 5 min, 52.10 on 1 min, 2:15 time cycle peak, just hit 51.81 intra. Nice reversal intra in the EPIC quad from just below support of area we had marked. Also watching for signals for longer term trend reversal possibilities.

oil trading room, trade alert, reversal, price target

Screen shot oil trading room trade alert high of day price target timing for reversal for oil trading strategy.

Image capture below from oil trade chat room shows 1 min crude oil model trend and 5 min chart with oil trade trending in to time cycle peak as alerted.

oil trade alert, trend, price target, time cycle

Image shows 1 min crude oil model trend and 5 min chart with oil trade trending in to time cycle peak as alerted

Image below from oil trading room alerting that price reversal strong structure expect possible trend reversal and possible price targets. The first image is the 30 minute EPIC algorithm chart model showing a strong bounce off the bottom area of the quadrant (the alerted price reversal area).

Strong signal the trend on wider time frame is in reversal mode with action seen in this quad today really clean

And because the bounce is so strong and structured properly in the quad that traders could start possibly looking at larger time frame charting for a possible trend reversal and possible price targets in that scenario.

maybe one quad more down but that would be it if so imo
60.41 would be trend reversal target, trading 51.91, 850 ticks ish
sorry its 59.22

trading room, oil trade alert, price targets, reversal, trend

Image from oil trading room alerting that price reversal strong structure expect possible trend reversal and possible price targets.

Image showing oil trade room signals on 1 minute chart for confirmation of intra day trend from HFT trade action. Normally we would explain or alert this as it was happening live, however, in today’s scenario I was doing double duty coding so I was sure to show our traders where / how they could confirm that the intra-day trend (for in future trading strategy) was still in play.

After two hits to the trend then the HFT programs set their confirmation pivot and continue trend. This confirms that a trade can continue looking in to the trend for the day, the price targets for day high and time cycle peak for the day.

this is where the HFTs hammered down today, after two hits to 1 min channel support and hit to 1 min range they hammered down

oil trading room, signals, HFT, confirmation of trend, alert

Image showing oil trade room signals on 1 minute chart for confirmation of intra day trend from HFT trade action.

Two chart images below of crude oil trade from trading room comparing last week trade action and this week in 30 Minute EPIC model. This week the trade is much more structured confirming signals that I will include in Part 2 of this report.

Last weeks quad action

This week quad action

oil charts, models, signal, confirmations

Two chart images for crude oil trade from trading room comparing last week trade action and this week in model. Confirming signals.

The final two images below show that price did in fact spike in to the time cycle peak for 2:15 PM and did reverse in this area of oil trade for a short opportunity as we had alerted much earlier in the day.

peaking in to time cycle intra

trend reversal, alert, oil, trading room, charts

The final two trading room images below show that price time cycle reversal oil trade short alerted earlier.

Below is the raw oil trading room video feed, if you are learning to trade oil you can correlate the time stamp you see on the images above to the time stamp on the video so you can scroll through the video to specifically what I was saying in the trading room during each alert period. The video below is only a raw feed and I am not broadcasting on mic all day – only when there are alerts and or trades in play (this is why I mention the time stamps). I only include the video because newer students of trade can utilize the live video (and associated comments and charting) to learn, but it is not packaged in short form so you have to dig a bit.

 

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.

Welcome to NYMEX WTI Light Sweet Crude Oil Futures.

Subscribe to Oil Trading Platform:

Standalone Oil Algorithm Newsletter (Member Charting Updates Distributed Weekly).

Real-Time Oil Trading Alerts (Oil Trade Alerts via Private Twitter Feed and Discord Private Chat Room).

Oil Trading Room / Algorithm Newsletter / Alert Bundle (Weekly Newsletter, Trading Broadcast Room, Chat Room, Real-Time Trade Alerts).

Commercial / Institutional Multi User License (for professional trading groups).

One-on-One Trade Coaching (Via Skype or in person).

Click here to find all information and pricing on Oil Newsletter, Trading Chat Room, Oil Alerts and more.

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, Trading Room, Strategy, Signals, Reversals, Trend, Time of Day, Time Cycles, Channels, Trims, Adds, Stop Orders.

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A Reliable Method to Determine in Advance Intra-Day Bottom Price, Day High Price, Trading Trend and Timing for Your Crude Oil Day Trading Strategy (Part 1).

The systematic process below that includes actual time stamped oil trade alerts, live video from our oil trading room and charts from our oil trade chat room is easily identifiable when the right signals of trade are in play on any day that you are trading crude oil.

The method below can be learned and reproduced by any trader that studies the trading set-up and strategy explained.

When a trader knows with high probability the likely range of trade for the day then a trading strategy for daytrading can be put in to place.

If you know the likely high of day, low of day, reversal area, trend of trade for the day and the likely timing of the price target areas / reversals this goes a long way to help you with your day trade strategy for executing trades. You can then execute your trades in accordance to those signals until they are no longer relevant or in play.

Hopefully in sharing what happened today in our oil trading room this will help you with your oil daytrading strategy in future.

Part One of this Article will show you how trade transpired today, what we alerted, the charting as it happened, the models we used to determine the high price of day, low price of day, time cycle peak for price targets, the trend on day and more.

Part Two of this Article will explain how you can use this information (the charts, alerts, trading room, chat etc) to develop your own daytrading strategy for crude oil trade.

June 16 Update – Part Two of this Article is Now Complete and can be viewed by clicking here.

How to Day Trade Crude Oil Low/High Price, Trend, Reversal, Size, Timing (Pt 2 Premium) | Trading Strategy.

Today was the weekly EIA Report at 10:30 AM. There was a substantial build reported. Below is a copy of a tweet from ZeroHedge.

Crude oil +6.77MM, Exp. -0.5MM
Gasoline +3.21MM
Distillate +4.57MM
Cushing +1.79MM

Prior to the EIA report coming out I was concerned about it and let the trading room know right before it was announced (the live video is in this article). Even though I expected the oil price to collapse I didn’t trade it down because we were in the last part of our final coding of our machine trade – so I was doing double duty (I wanted to get done).

So the report comes out and oil starts to collapse (you can see all this on the video from the oil trading room for those learning about how oil trades and what to watch for).

At 10:54 AM I alert the oil trading room (with voice broadcast and charting), the oil chat room (see screen capture image below) and alert to the member Twitter feed (screen shot below) that we are looking at the 50.84 area of FX USOIL WTI for possible long trade (trend reversal) for a possible bottom price area on the day. We trade CL futures but alert on USOIL WTI for consistency between instruments of trade for crude oil.

Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.

oil, trade, alert

Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.

Then at 11:54 the price of oil drops in to the area previously alerts, spikes down with a flash and trade reverses. In the oil chat room screen shot below you can see I alerted our long oil trade (machine trade in this instance) in the 50.70s and then the machine trade closed and fired a few other times. This ended up in fact being the low of day in trade. I had alerted that I was looking at the 50.84 area and price hit 50.70s and reversed.

Software fired in there 50.70 s to closing 50.90 s, I didn’t but we’ll see if it holds the range for a bounce.

oil trading room, alert, bottom price, trend reversal area

Looking 50.84 area possible longs (bottom of quad) trading 51.26 intra. Shorting all pops thereafter in to quad area resistance.

You can also see in the screen shot that I was sharing various chart set-ups to help our traders with their trading strategies for the day so they knew where the structured areas of support, resistance etc were.

Then at 12:07 PM I alerted to the oil trading room by voice broadcast, chat room with charting and on live alert feed that the structure of trade had improved and that we expected that the low of day for trade had in fact been put in confirming a reversal.

improved structure, likely near term low in

oil, trade, alert, price, reversal

Oil trade alert, trading room alert low of day price crude oil reversal trend in play.

Then shortly after 12:00 I alerted (to live trading room, chat room, alert feed) that there was a time cycle peak coming at 2:15 (in other words if you are long on the reversal from the day lows that 2:15 would be the area of time on the day for a high for your price targeting on the trade).

I also gave the resistance levels between where trade was at near the bottom of the trading quad (near the reversal area at bottom) and where we seen the top price target of trade. In other words, if you are long the trade watch for the 20 MA on the 5 minute chart above and the mid quad (mid channel) resistance on the 30 minute EPIC model chart.

2:15 time cycle should be the top on any retrace up on the day
20 MA on 5 min overhead
2:15 PM time cycle most bullish scenario we have is 51.90 (mid channel on EPIC quad) trading 51.32
body of 30 min candle at machine line

Then after the resistance areas are overcome in uptrend trade on the day at 1:20 PM (in advance of the 2:15 time cycle peak) I alert in more detail the various price target areas that represent various model charts on different time-frames so that our traders know exactly what levels to watch as price nears both time and region of trade for our trending price targets for the day trade.

Resistance we are watching intra 51.86 mid channel EPIC, 52.14 5 min, 52.10 on 1 min, 2:15 time cycle peak, just hit 51.81 intra. Nice reversal intra in the EPIC quad from just below support of area we had marked. Also watching for signals for longer term trend reversal possibilities.

oil trading room, trade alert, reversal, price target

Screen shot oil trading room trade alert high of day price target timing for reversal for oil trading strategy.

Image capture below from oil trade chat room shows 1 min crude oil model trend and 5 min chart with oil trade trending in to time cycle peak as alerted.

oil trade alert, trend, price target, time cycle

Image shows 1 min crude oil model trend and 5 min chart with oil trade trending in to time cycle peak as alerted

Image below from oil trading room alerting that price reversal strong structure expect possible trend reversal and possible price targets. The first image is the 30 minute EPIC algorithm chart model showing a strong bounce off the bottom area of the quadrant (the alerted price reversal area).

Strong signal the trend on wider time frame is in reversal mode with action seen in this quad today really clean

And because the bounce is so strong and structured properly in the quad that traders could start possibly looking at larger time frame charting for a possible trend reversal and possible price targets in that scenario.

maybe one quad more down but that would be it if so imo
60.41 would be trend reversal target, trading 51.91, 850 ticks ish
sorry its 59.22

trading room, oil trade alert, price targets, reversal, trend

Image from oil trading room alerting that price reversal strong structure expect possible trend reversal and possible price targets.

Image showing oil trade room signals on 1 minute chart for confirmation of intra day trend from HFT trade action. Normally we would explain or alert this as it was happening live, however, in today’s scenario I was doing double duty coding so I was sure to show our traders where / how they could confirm that the intra-day trend (for in future trading strategy) was still in play.

After two hits to the trend then the HFT programs set their confirmation pivot and continue trend. This confirms that a trade can continue looking in to the trend for the day, the price targets for day high and time cycle peak for the day.

this is where the HFTs hammered down today, after two hits to 1 min channel support and hit to 1 min range they hammered down

oil trading room, signals, HFT, confirmation of trend, alert

Image showing oil trade room signals on 1 minute chart for confirmation of intra day trend from HFT trade action.

Two chart images below of crude oil trade from trading room comparing last week trade action and this week in 30 Minute EPIC model. This week the trade is much more structured confirming signals that I will include in Part 2 of this report.

Last weeks quad action

This week quad action

oil charts, models, signal, confirmations

Two chart images for crude oil trade from trading room comparing last week trade action and this week in model. Confirming signals.

The final two images below show that price did in fact spike in to the time cycle peak for 2:15 PM and did reverse in this area of oil trade for a short opportunity as we had alerted much earlier in the day.

peaking in to time cycle intra

trend reversal, alert, oil, trading room, charts

The final two trading room images below show that price time cycle reversal oil trade short alerted earlier.

Next, in Part Two of this article (sent to premium members) I will explain exactly how you can use this information (the charts, alerts, trading room, chat etc) to develop your own day trading strategy for crude oil trade.

I will explain trade signals such as how to know where the time cycles are, what the expected high of day and low of day is most probable and what the trend on the day should be.

Below is the raw oil trading room video feed, if you are learning to trade oil you can correlate the time stamp you see on the images above to the time stamp on the video so you can scroll through the video to specifically what I was saying in the trading room during each alert period. The video below is only a raw feed and I am not broadcasting on mic all day – only when there are alerts and or trades in play (this is why I mention the time stamps). I only include the video because newer students of trade can utilize the live video (and associated comments and charting) to learn, but it is not packaged in short form so you have to dig a bit.

 

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.

Welcome to NYMEX WTI Light Sweet Crude Oil Futures.

Subscribe to Oil Trading Platform:

At check-out use coupon code “epic30” for 30% off. Either Oil Trade Alerts Only or Oil Trade Bundle (Live Room, Reports, Alerts).

Standalone Oil Algorithm Newsletter (Member Charting Updates Distributed Weekly).

Real-Time Oil Trading Alerts (Oil Trade Alerts via Private Twitter Feed and Discord Private Chat Room).

Oil Trading Room / Algorithm Newsletter / Alert Bundle (Weekly Newsletter, Trading Broadcast Room, Chat Room, Real-Time Trade Alerts).

Commercial / Institutional Multi User License (for professional trading groups).

One-on-One Trade Coaching (Via Skype or in person).

Click here to find all information and pricing on Oil Newsletter, Trading Chat Room, Oil Alerts and more.

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, Trading Room, Strategy, Signals, Reversals, Trend, Price Targets, Time Cycle

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Part Two: Deep Dive in to Day-Trading The One Minute Crude Oil Time-Frame. Short Selling Chart Structure, Price Reversal Intra-Day for Up Trend.

Part One of this Article is here Day Trading Signals for Crude Oil Sell-Off Shorting & Bullish Reversal | 1 Minute Chart | Oil Trading Strategies.

For this premium member post we will use this video (from part one) as a guide:

A Quick Explanation of Our Discipline.

We chart financial instruments using both conventional and algorithmic charting methods. Charted on all time-frames, we use up to fifty conventional indicators and back test charting up to sixty months. When complete, the algorithmic models then provide a structure of trade representing primary support and resistance areas, time cycle considerations and more. The process is ongoing with real-world testing and models are updated regularly.

Specific to crude oil, we now utilize eighteen proprietary algorithmic models (representing various time-frames). The models / data are used in our personal trading, distributed to internal members and commercial enterprise clients on regular rotation, broadcast live to our oil trading room, timely set-ups are shared to the private member Discord oil chat room and coded to our machine trading software.

This post deals specifically with one of eighteen models – the one minute time frame. And more specifically the sell off structure and reversal points that signal a trend change intra-day with crude oil trade.

The Structure of a Crude Oil Intra-Day Sell Off.

As explained in Part 1 of this post, crude oil sells off within a structure that is often very precise. Understanding the structure of trade can assist a daytrader in many areas of his/her trade management. This can include trade sizing, working the ebb and flow of trade up and down in price, setting stop orders, determining where, when and why to size in and hold and where to be cautious or not trade at all.

Learn From Our Machine Trade Development Process and Prior Trade Experience.

We, in our own development are dealing with these trade management considerations within intra-day trade. I myself as a day-trader can assess these indications or signals drawing on decades of prior experience, but this process becomes much different when you start coding software to trade crude oil.

When I am trading (as a person mechanically executing trades) I am using what I think is instinct and experience. But what exactly is that process? This is complicated to assess but is required when coding software to trade for you and is also important for any human trader to consider.

What I have learned is that I didn’t know anything about how crude oil really trades. I thought I knew, but I didn’t. And as we continue to develop software we continue to discover areas within trade on various time frames where machine liquidity has or is creating other points of structured trade that can be modeled. It is a very manually intensive process.

When you code software to trade a financial instrument such as crude oil futures it becomes an absolute discipline. It has to have an absolute rules-based system to execute trades (in our case our oil software now has near 4000 rules or instructions that it weighs against to make trade decisions). It is ones and zeros. There is no room for cognitive dissonance – no room for fooling oneself (more on this in a future post).

The main point is this, oil trade is very structured (there are times of day or week when it is loose but for the most part it is structured). It is structured because it is (in large part) machine liquidity that is trading crude oil intra-day – estimated to be well over 80%.

Commodity trading enters the age of digitisation.

Commodities Traders Increasingly Adopt Algorithms.

We are sharing our experience in the development of such software to assist human traders to be able to compete with that machine driven trade in oil (and we are providing data to other enterprise groups).

You will find that crude oil trades like no other and it does not trade the way conventional traders think it trades. The rules are in large part very different than what the average retail trader thinks. 

We have recently completed coding software of the eighteen oil trade algorithm models (and our proprietary IDENT order flow software is fully in the code also). Last week we ran the software in real-world trade and finished cleaning the bugs from the code (we encountered ten and they weren’t nice to deal with – we had some intra-day draw-downs). We are now simply adding set-ups to the software (which equates to small updates vs large model code development) and we are also tweaking the software as we observe it trading real-time.

In other words, our development is largely done because all the models are in the software now and the trading sequences have all run which has allowed us to de-bug the software. Here forward we expect a much smoother ride with the software and I suspect that I as a human trader in crude oil will have a hard time competing with the software’s performance. In fact I would bet my life on it.

Why do I ramble on about this? Because a human trader has no other choice but to accept this reality if they are wanting to compete with the machines. Accepting this reality is step one. Step two is then developing a trading strategy based on what the machines are doing (the structure of the software) to compete and profit off the trade of crude oil.

I suspect that I as a human trader in crude oil that I will have a hard time competing with the software’s performance. In fact I would bet my life on it.

Back to Your Strategy. Lets Look at the Crude Oil Sell-Off Structure, Intra-Day Price Action and How to Trade the Signals Within the One Minute Chart Model.

Be sure you have read part one of this article, many of the intra-day oil trading strategy points of reference are explained in more detail at that post also.

Structure of the Financial Instrument is Key. Knowing the algorithmic structure (and conventional charting) for the time-frame you are trading (and preferably for all time-frames) is key to your success. This structure then becomes your point of reference (map / GPS / playing field) for developing your strategy (it is the structure that the machines are trading within).

The one minute model structure – the support and resistance lines and indicators include;

  • The trading range is shown on the chart as a thick horizontal dotted line with a red dotted line and a blue dotted line on either side of the white. When trade is very predictable this becomes important for support and resistance, especially in a squeeze set-up.
  • The other horizontal white lines are support and resistance points to consider – the thicker the line the more important they are in trade strategy consideration.
  • The down-sloping (down-trending) yellow dotted lines (thin) are the least in consideration, but are often included on the chart for our reference.
  • The up-sloping (up-trending) yellow lines are to be considered as support and resistance during predictable (high volume) trading periods as support and resistance in sell-offs.
  • The up-sloping (up-trending) white lines are decision lines, or you could look at it as indecision areas of trade. When trade is deciding to continue down (the yellow lines) or continue or reverse up (the blue down-trending) lines (see next point below).
  • The down-sloping (down-trending) blue lines are to be used as support and resistance when trade is bullish (again, as with all, these are more predictable in high volume periods of trade).
  • It is important to note that the lines are proprietary algorithmic calculated trend-lines (calculated based on historical trade).
  • And also of note, the lines are hand drawn “on-the-fly” by our lead trader or a staff member as time allows and sent out to clients, be aware that errors are common. We expect to have proprietary software in future for our clients that will minimize these issues.
  • Indicators include the 20 MA, 50 MA, 100 MA, 200 MA, VWAP, price and volume. You can double tap the field area of the chart to access Stochastic RSI, MACD and Squeeze Momentum Indicator.

Below is a screen shot of the one minute crude oil day-trading algorithmic model.

Direct links to the chart models are emailed to members in small group batches or for individual or commercial use. Please let us know if you are using more than one device to access the charting to assist us in dissemination of the model links.

daytrading, chart, crude, oil

One Minute Crude Oil Trading Chart Model for Day-Trader Signals in Developing Intra-Day Trade Strategy.

Other Chart Time-Frame Support and Resistance Matter. You need to be aware of all primary time-frames. You need the conventional charting trade set-ups that are in play at your disposal and the algorithmic structured models. The primary time frames we use are the one minute, 5 minute and 30 minute charting. We also use 15 minute, 60, 240, daily, weekly and monthly – often.

Knowing where the primary support and resistance are on the other time frames will provide clues to possible points of intra-day price reversal and / or points to trim your short or long positions.

Below is a recent example showing a close up of the one month oil model. Trade was recently near an important area of resistance on the one month model. The trader should then to develop a sound strategy look to the weekly, daily, 240 minute, one hour, 30 minute, 15 minute and 5 minute models to confirm price is breaking down at that resistance level and trade it on the one minute time-frame intra-day.

one month, crude, oil, trading, model

Recent example of oil sell off at key point of resistance on one month model, important for trade strategy to know.

And below on the thirty minute chart (as another example) trade was testing key resistance and then systematically sold off through the model. It continued below and a deep sell off ensued.

This resistance area (as shown) as being key could be confirmed as such on all the models.

For us in the back-office this was very frustrating because we had just finished coding the eighteen models to the new version of software and the old version was 20% short crude oil and when we loaded the new software the old was shut down and the positions were closed.

The old software (had we left it to trade the sequence) would have had a considerable gain trading the full range of the sell-off because the full range of the sell off was coded to the prior software. But unfortunately that is how it goes when you are developing. Thankfully the eighteen model version is our last for crude oil and only small tweaks and set-up updates will occur.

30 min, oil, trading, model

Prior to sell off resistance on 30 minute oil trading model had been tested and price systematically sold off.

One other example, and there are many (a simple screen shot from my Trading View account), is a 15 model chart provided to members on May 19 before the massive sell-off started showing the key resistance and the full trading range for their trading strategy – this was a premium set-up.

It wasn’t long after this the sell off took the oil price even lower than key support.

This was also when we loaded the new software (prior to the sell off), frustrating to say the least because we were de-bugging very large new version software instead of enjoying the harvest of the set-up (never again).

crude oil, strategy, chart, trade, 15 min

Screen shot of 15 min oil trading model that shows May 19 members had range of trade ready for sell-off for strategy

Increased Volatility Within Intra-Day Trade Structure. The price action of an intra-day crude oil sell-off is volatile (actually, the price action at certain points within the model has more velocity) and yet price is more precisely structured than at most other areas of trade.

When price falls out of the yellow line support you can short to the next yellow line support. However, the better or preferred method is to short in the sequence of trade as price bounces in to resistance.

Either method is okay (the shorting in to resistance is better) and both need to be harnessed in discipline. Discipline to cut your position when you are wrong.

Knowing where / when you are wrong is key – close your position fast and take a small loss.

In the image below of the one minute model during recent sell off trade action you see the following;

  • First trade fell through the blue bullish buy trade signal (top left of screen burgundy arrow) signalling no intra-day reversal in play yet and you can continue in a short selling position.
  • Price of oil then fell through the yellow line support (pink arrow) which is used as support in a sell-off for your trade strategy. So if you did trim your short in to that yellow line support from your previous short you could now add some again (below the yellow line) and look toward the next yellow line as a possible support in the sequence.
  • Price then continued in the trade sequence right through the next blue line (bull buy line signal) and in to the next sell-off sequence support area (signalling time to trim and cover or close), shown with the down trending green arrow on chart.
  • Price then bounced at the yellow line (white arrow) and went straight to the resistance line (just under the previous short confirmation line) and was also a resistance test of the 20 MA (blue arrow) – this was an ideal area to short again. Knowing that you are wrong is if price did not stop there and continued up to breach the previous yellow support / resistance line (pink arrow).
  • Price then sold off again dropping two floors to the 57.30 s – it then over shot the support of the yellow line (which often signals a near term trend reversal). Whenever price over shoots a key resistance or support line during active trade be sure to use caution because this is often a near term reversal point.
  • The area circled in white is the consolidation area of trade (hitting all kind of trend lines) before confirming the reversal in trade intra-day in crude oil.
  • The red arrow shows a clear confirmation bull buy bounce at a buy trigger for uptrend and the yellow arrow shows price breach a bullish part of the sequence for further confirmation that an intra day reversal in price is now in play. Additionally all the moving averages have now been breached by price action.
daytraders, one min, oil, chart

One minute crude oil daytrading model for our traders to assess short and long positions and determine reversal areas.

Precise Support, Resistance and Decision Areas. When the price of oil sells off it drops violently but stops at the next algorithmic support (yellow lines) with near precision almost every time. The opposite is true when it is trading in an intra-day uptrend (the blue lines). When price is indecisive it will use the white trend lines more and also perhaps the other support and resistance lines on the chart model. You can see example of this in the chart above.

Various Decisions at Support in Trade. When the sell-off stops at support it then will possibly bounce testing a variety of resistance points, stall and trade near support or violently drop to the next support in the sell-off sequence.

Determining Trend-Reversal and/or Low of Day Price. At points in the sell-off there are then indications of a near term bottom or trend reversal that may develop.

Some clues for a near term bottom and possible intra-day price reversal include (as noted above) overshooting support with immediate buy programs kicking in sending price higher, inter trend bounces in price that may become higher and higher or price may predictably start firing off (or respecting) decision areas of the model or bullish support and resistance decisions within the model (this is also shown in the oil chart above).

Time of day and time cycle decisions become important (see below) as does order flow volume (and more specifically who is in the trade, the velocity of the volume, when the volume is coming in and where on the model the volume is).

There are other signals to watch for also when expecting that an intra-day low has been put in or a trend reversal in price has occurred (more in a near future post specific to this topic).

Sell-Off Trends, Bullish Trends, Indecision Areas of Trade. The structure in sell-offs intra-day, in bullish trends and during decisions is different. Each use their own area of support and resistance points of structure (as explained above).

Time of Day Considerations and Important Dates. When trading crude oil you need to know when the various global regular market exchange sessions start (how premarket and open price action typically affects the price of oil) and how these various markets affect price action.

For example, during early futures trading, very little machine trade is active. This causes machine trade predictability to be “sloppy” or “loose”. Conventional indicators should be weighted heavier until machine liquidity starts to increase (normally around 3 am Eastern time).

Holidays such as the US Memorial Day holiday is another example of low liquidity in the crude oil futures markets – machine trade and model precision can be less than optimum also.

Machine liquidity will however “kick-in” if there is a news event that causes considerable action in trade. Holidays can be very “loose” also and “slippage” within models is common.

The daily US crude oil settlement at 2:30 Eastern, Tuesday 4:30 crude oil API report, Wednesday API report are also important times of trade to understand. Volatility can be extreme during these events and unless you are sizing your trade minimally or are an expert you may want to close out well before and re-enter any intra-day trading after the event (swing trades and longer term trend trades may not have consideration toward these times of the week).

Regular premarket action and market open action is important if you are daytrading crude oil. Understanding how the regular market price action works, where important support and resistance areas are and where important time cycle decisions are on various time-frames becomes very important for a day trader.

In all scenarios, especially in active trade, the one minute model can be used to assess and deploy your trading strategy minute by minute.

Time Cycles. Time cycles are critical. There are time cycles on all time frames of trade. For example, on the 5 minute model you will notice as trade nears a time cycle peak (represented on the 5 minute chart as a vertical green line) that trade will usually more aggressively trend toward a support or resistance.

crude, oil, time cycles, daytrading, chart

Example of crude oil moving from time cycle to time cycle peak intra day on 5 minute trading chart, follow general trend.

On the 30 minute crude oil EPIC model the time cycles are highlighted as Tuesday 4:30 API, Wednesday 10:30 EIA Report and Friday 1:00 Est Rig Count.

In Part One of this report I highlighted the time cycle on the one minute chart (pointing out where two or more trendlines meet price) and you could see the result of that price target (or time cycle). A time cycle is a commonly used area of price target trade for the machine programming to use in probabilities of crude oil trade.

oil, trading, room, reversal, trade, signal, alert

Image (screen shot oil trading room) oil trade hit price target through resistance confirms uptrend trading signals

There are many, many examples of time cycles in trade (so many I cant include them all in this article). I will endeavor to continue sharing such information as time allows in the oil trading chat room on Discord (as I have for some time, reviewing previous signals and guidance in the chat room is wise for newer members). I will also continue to post what we learn about the time cycles as they apply to crude oil trade on the various models in future articles.

Members / clients can also review previous EPIC Oil Algorithm posts on our website by clicking on the blog section and then selecting the EPIC posts link.

Know When to Trade a Bounce at Support or Resistance. Knowing how to time your entry specific to probability of success is very important. For example, when trade is selling off you would watch each bounce very carefully. How many ticks was the bounce and is the range increasing? Is the volume / order flow increasing at each support? Is there evidence of a final take-out of stop orders? A final slam down of price under the support and a vicious reversal is a common reversal trade set up in crude oil.

Machine Price Targets. Knowing where (and why) the price targets are for machine trade is on each time frame can help with your trading strategy. Where two or meet price.

Moving Averages. We often cover in the live oil trading room how moving averages determine price action during trade each day. Moving averages affect trade action differently on different time frames and at different areas of each structure. Here also more articles coming. For now, the most important consideration is that moving averages should be considered in your trade strategy as support and resistance within the time frame you are trading. You should also be aware of moving average support and resistance on various time frames (more than just the time frame you are trading) so that you are aware of any critical decisions on the near term horizon when daytradingc crude oil.

Trade Sizing. Obviously trade sizing should be more considerable at range area support and resistance. You can leg in to these moves and typically find considerable profit for your annual returns in these areas of trade. Daytrading should find your sizing to be on the low side. I will be writing very detailed articles soon on this topic as we refine our machine trade software. I also intend to share some of this information live in the oil trading room on a regular basis near terms.

Sizing your daytrading orders should be small as I mentioned, however, if you get good at timing the reversals in trend this can allow you to size in to those intr-day trends. I highly encourage daytraders to focus on the reversals. I have written some posts on the topic but intend to focus on reversals and trade sizing in the very near term both in writing and in the main trading room (posting videos etc also).

Daily Trend Signals (Following the Trend Intra-Day).

Intra-day trend for daytraders in crude oil is critical to lock in (it is also for our machine trade coding).

We have recently (as I mentioned) finished coding the 18 models (which was the biggest part of the heavy lifting – we have the structured models designed, tested in real world and coded). Also critical was order flow, we have that done. Next critical are the “set-ups” so that a daytrader or the software then knows what set-up intra-day is in play.

More specifically (for this post) the intra day trend of trade signal is critical. Knowing where the reversals are likely to take place, when they have occurred (confirmation) or even where continuation is taking place and then being able to size in to that trend in a predictable yet low risk way is really, really important for an oil daytrader.

This specifically will be our near term focus for our members, enterprise clients and our software development “tweaks” as one of the primary main focus set ups to be coded. I can’t over-emphasize its importance to your ROI.

You will find our focus specific to this over the coming days in the trading room, on Discord and in articles I provide members.

Below is an image that provides a clear example from today’s trade action in crude oil futures (on the Memorial Day Holiday Monday). The price moved 100 points from 58.22 at 9:00 AM this morning to 59.22 at near 2:30 as of time of writing.

Our machine software did not fire on the trade for numerous reasons (even though the trend was clear, it was confirmed structure on the 30 min EPIC model, it was firing off the blue support and resistance on the one minute model etc).

The software primarily did not fire because the liquidity was not in trade today for the software to confirm the trade.

So this is a clear example of the importance of having the trade set-ups also programmed to the software and giving the set-ups appropriate weight in the code vs. model structure and order flow. This is also very important for the human daytrader executing manual trades.

You will find that most days, at important support and resistance areas of the primary models confirmed at important time of day of trade that a trend for an excellent intra-day trade within your daytrade strategy is not only possible, but we believe highly probable to execute on a high percentage of days.

Trend following intra-day will be (as I’ve said) a very very high focus point for us near term (and the subsequent sizing etc).

daytrading, trend, signals, strategy, crude oil

Daytrading range in crude oil on holiday 58.22 to 59.22 trending strategy signals.

In closing I’ll say that we’ve come a long way, it hasn’t been an easy grind up but we’re doing it one step at a time. I really appreciate you coming along with us on this journey.

If you have any other ideas or things you have learned in your own trading regarding this article please send me an email at compoundtradingofficial@gmail.com or shoot me a note if you have any questions etc. As I mentioned earlier in this post I will email the links for models independent of this article and the weekly EPIC reporting (in case you didn’t know) will be out Tuesday due to the Memorial Day Holiday to allow for the chart data to reset for the week before we run the chart models.

Have a great week traders!

Curt

 

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.

Welcome to NYMEX WTI Light Sweet Crude Oil Futures.

Subscribe to Oil Trading Platform:

Standalone Oil Algorithm Newsletter (Member Charting Updates Distributed Weekly).

Real-Time Oil Trading Alerts (Oil Trade Alerts via Private Twitter Feed and Discord Private Chat Room).

Oil Trading Room / Algorithm Newsletter / Alert Bundle (Weekly Newsletter, Trading Broadcast Room, Chat Room, Real-Time Trade Alerts).

Commercial / Institutional Multi User License (for professional trading groups).

One-on-One Trade Coaching (Via Skype or in person).

Click here to find all information and pricing on Oil Newsletter, Trading Chat Room, Oil Alerts and more.

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, Trading Room, Strategy, Signals, Shorting, Support, Resistance, Reversals, Trend Following, Trending, USOIL, WTI, CL_F, USO

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Below You Will Find Proprietary Oil Trading Signals Not Available Elsewhere. 

When Crude Oil Starts Selling Off Intra-Day Volatility Increases Fast. Knowing Where and Having the Signals for Support and Resistance On The One Minute Chart Will Help Your Trading Strategy.

If you day-trade crude oil futures contracts (or if you are learning how to day trade crude oil) the chart models and signals below will help you understand the structure of trade on intra-day charting (like using a GPS or a map).

The trade signals provided below will increase your trading win rate and ROI on each trade (as you learn to trade the set-ups or strategies).

We can also help you with confirming that the trend is actually bearish (selling in downtrend) and when price is likely to reverse intra-day and oil trade is likely to turn bullish. 

This is part one of a two part post (part one is public and part two is premium member only).

How Oil Sells Off Intra-day on Stairs to Support Floors Down.

The structure of oil sell-offs is not the same as when oil trades up. When crude oil trade is bearish intra-day you will find that it has specific areas of support / floors (this is also true when price is bullish but the structure or steps of trade are different).

When oil is trading down the price will often quickly drop to the next support and will then hang around for sometime and possibly test resistance areas for a possible reversal. When the reversal doesn’t happen or work then price drops quickly to the next floor of support.

The price of oil drops quickly to support and then the bulls will try and trade price back up (along with a certain amount of the shorts covering short positions) for a snap back or price reversal trade. At each support you will find this process occurring.

The more support there is on the charting (on various chart time-frames) the more likely a snap-back trade will occur (price reverses intra-day). This is why we have algorithmic models and conventional charting for all time frames that we use in the oil trading room, in member reporting and coded in to our machine trading software.

The goal is to know where each support and resistance point is on the charting so that you can develop a trading strategy for intra day moves in oil price.  

When you know where the support and resistance is you can then day trade the price of oil with more perspective or clarity.

Before you can learn how to trade a financial instrument (such as crude oil futures contracts) it is important to know the structure of the instrument (as it applies to the charting on various time-frames).

Once you know the structure (the playing field or like I refer to it as a GPS or map) then you need to learn how to trade that specific structure (this is where your personal trading style and strategies come in to play).

Knowing where support and resistance is on the charting allows you to set stops properly, it also helps you with sizing the number of contracts you are trading (trimming and adding to your trade size) and more.

There are two reasons we know the chart structure in the trade of oil (every financial instrument has a structure – like your DNA or the rings on a tree).

One reason is that we construct algorithmic charting models and the other is that we are coding for machine trade of oil. Both reasons require us to back test our charting. It isn’t enough to chart conventional trend-lines (or whatever it is you are charting) and it isn’t enough to design an algorithmic chart model – the assumptions for consideration in trade, such as support and resistances areas, need to be back tested so that you have a quantifiable high probability of success.

You need to know that your assumptions provide highly probable set-ups (trade signals) to provide you a trading edge.

When we chart for the purpose of trading signals we first start with conventional charting (on all time frames) and then move to charting algorithmic models of highly probable areas of support and resistance of trade (visual representation of important structure points of the charting) and then we move to coding what we know to be most probable areas of support and resistance in trade. I should note for completeness that our models provide much more than support and resistance, there are other important trade signals such as time cycles, the structure of trade itself on various time-frames and much more.

We use the charting for crude oil on thirteen different time-frames (1 minute charting through to monthly charting), we chart it on conventional charts, work with algorithmic modelling and back test all the various indicators for up to 60 months (such as moving averages, VWAP, MACD, stochastic RSI and more).

When we back test our assumptions we are calculating the probability of that structure in trade re-occurring. When we find a structure with high probability of repeating then we model that structure and code it to our machine trade software.

In this specific area of day-trading (intra-day sell-offs and reversals) we can help you with what structure is in play on the one minute chart as oil sells off and what to watch for so that you know the sell-off is likely done and the price trend is about to change and turn bullish for price reversal.

Support And Resistance On The One Minute Oil Chart in Sell-Offs.

Specific to crude oil, sell-off support and resistance on the charting is VERY PREDICTABLE. You will find that the areas of support are very precise and price will step down in a very structured way on the chart – this is a near exact science.

Why is the trade of oil so precise on the one minute chart when oil sells off? The answer is very likely because the trade of oil is now mostly done by software programmed / coded for machine trade and this machine trade liquidity has caused very specific structures of trade to manifest.

Lets Look at Some Recent Crude Oil Trade From our Oil Trading Room.

Below is a screen shot from our oil trade chat room on Discord (which is not the same as the live broadcast oil trading room) of a comment and a chart of intra day trade in crude oil (this was posted at 1:03 PM last Thursday).

My comment in the trading room reads “perfect structured sell down out of support in to next buy trigger”. What this means is that crude oil sold off intra day, it lost its area of support (the yellow diagonal trend line on the one minute chart model) and then dropped perfectly to the next support decision line on the chart (yellow line again) and then price bounced to test resistance.

By the way, the crude oil trade alerts are both what you see below (the Discord private server screen images below) and alerted on a private member Twitter feed.

This structure (you see below) occurred over and over again daily this week during sell-offs. This is a very predictable structure for knowing where to short oil intra-day, where to trim (cover) size of your short position and where to possibly find support for a reversal trade in your intra-day trading strategy.

Click here for an article that explains what short selling is.

This is by far one of the most predictable signals available for day-trading crude oil you will find. It has one of the highest probabilities of success in oil trade model charting.

The key to success however is learning what the structure is (having the model at your disposal for when you trade) so that you can size your trades properly and set stop orders properly etc – learning how to use the signals for your strategy and knowing when trade is likely to stop selling off so that you can then begin planning for a trend reversal.

This is a very predictable structure for knowing where to short oil intra-day, where to trim (cover) size of your short position and where to possibly find support for a reversal trade in your intra-day trading strategy.

crude, oil, trading, room, chart

Crude oil trading chat room screen capture of day trade in oil selling off using support. #oil #tradingroom #daytrading

And then in the screen shot below from the oil trading room you will see on the next chart posted to the room that oil started to bounce (or trade up) from the support (or buy trigger signal) on the chart. I then asked our software developer Jeremy to note that the software did not trigger a long trade for our coding updates to be done later that night.

Look close at his answer / comment to my request, he knew why the software did not signal a trigger for a long trade (and also why there was no trade alert as such on our member feed to buy)… it was because the order flow program (our proprietary IDENT software) knew that the machine liquidity in the markets was not buying that support and that they were going to sell it off again.

the order flow program (our proprietary IDENT software) knew that the machine liquidity in the markets was not buying that support and that they were going to sell it off again.

oil, trading, day trading, traders, room

Screen shot of oil trading room, price of oil trying to reverse, day trading signals for our strategy and discussion between traders.

And sure enough, if you look at the next image below you see that they sold oil off again shorting it down to the next step in the sequence to the next support on the chart structure (next yellow line down representing next support in a sell off). Again, it was precise trade action.

they sold oil off again shorting it down to the next step in the sequence to the next support on the chart structure

crude, oil, short selling, daytrade, signal

Oil short sell signal for daytrading strategy on the algorithmic chart model for day traders.

Then you will notice that I alerted the oil trading room (at 1:12 PM Thursday) that the bulls are starting to buy at each support area of the one minute chart (in other words, be aware that a price reversal in intra-day trade could occur soon).

There were buy programs and/or day-traders starting to buy at supports that are not support areas for a continued sell-off, they are areas of support for either indecision (or a decision is needed) or support for trading bullish (or in an uptrend).

This is key – the fact that buys were coming in at bullish support areas or decision areas on the model (this is an early sign or signal of an imminent reversal). These lines are at the white diagonal (signals a decision area of charting) and the blue diagonal (signals bullish support) on the chart model.

Oil was trading at 57.44 on FX USOIL WTI at the time.

This is key – the fact that buys were coming in at bullish support areas or decision areas on the model (this is an early sign or signal of an imminent reversal).

trade signal, alert, reversal, oil trade room

Screen capture of oil trading room alert signalling for daytraders to watch for trend reversal in day trade action.

And then next trade in crude oil reversed with a bounce and was threatening a confirmation signal for trend reversal. I was explaining to our day traders in the room at the time (this screen shot is taken on the weekend so you don’t see who was in the oil trade room at the time in the image) what to watch for in intra-day trade action for a confirmation of trend reversal. In this example I highlighted an area of the chart model where machines are programmed for a price target.

In this example I highlighted an area of the chart model where machines are programmed for a price target.

trend reversal, bounce, trade, crude oil

And then next trade in crude oil reversed with a bounce and was threatening a confirmation signal for trend reversal.

And then in this image (screen shot from oil trading room) you see that trade hit the price target and got through resistance confirming more that the low of day in trade had been put in and that we were now alerting bias to uptrend trading signals going forward for oil trade on the day.

Note the low of day was in fact 57.33 and I has alerted at 57.44 that the bulls were starting to step in (during the extreme sell-off) at key bullish areas of the algorithm chart model – this is machine trade. Knowing what the large liquidity in machine trade is doing is key now when day trading crude oil. This is very important.

Note the low of day was in fact 57.33 and I has alerted at 57.44 that the bulls were starting to step in (during the extreme sell-off) at key bullish areas of the algorithm chart model.

oil, trading, room, reversal, trade, signal, alert

Image (screen shot oil trading room) oil trade hit price target through resistance confirms uptrend trading signals

Looking at the chart below you can see very clearly how precise the day trading signals are on the daytrading algorithmic crude oil model.

  • The green arrows show three shorting opportunities from yellow diagonal support / resistance to the next yellow diagonal support / resistance (like stairs stepping trade down in the model).
  • You will notice that the last stair down that trade over shot the yellow line a bit, this is a signal that an intra-day bottom is being put in.
  • You can also notice (from the charts shown above) that as buying came in at the decision support / resistance lines (white diagonal lines on chart model) and at the blue decision diagonal support / resistance lines that I alerted a possible trend reversal in trade.
  • Then you will notice (see chart below) that trade got through the yellow resistance after bouncing (yellow arrow on chart) – this is a bullish intra-day signal that a reversal is likely near.
  • And then next in trade you will see that trade bounced at the blue diagonal trend-line (blue arrow) when it pulled back from resistance, a bounce at a blue line is further confirmation that trade is now bullish intra-day. The blue lines are used as support and resistance in an intra-day uptrend.
  • And then the subsequent blue arrows on the chart show how trade breached in to the next bullish area, then pulled back and used the blue line as support (after confirming up after hitting a decision white line) for a bounce and then so on through the bullish trade reversal in the daytrading sequence.
  • Blue is for trading in uptrend, yellow is trading a sell off, white is a reference point for a decision to go up or down in trend on the model.
  • The trend-lines on this algorithm model are not conventional. The trend-lines are algorithmic calculations and therefore proprietary and not available elsewhere.

How powerful is that for an oil daytrader?

Knowing exactly where the support and resistance is during a sell-off and knowing with high probability where the turn is likely to happen for reversal in trade and then knowing exactly where to trade the uptrend.

daytrading, crude, oil, signals, algorithm

Algorithmic chart model for shorting oil, trading a reversal in oil and decision areas of daytrading signals.

Below is the video explanation that accompanies this post (live oil trading room footage included).

In part two (the premium member post) we will take a deeper look at strategies for trading the one minute model (such as trade sizing and seeing the reversals in advance) and I will provide chart links to the proprietary algorithmic models via email to our members.

Protected: Part 2. Deep Dive Day Trading Signals Crude Oil Sell-Off, Reversals, Trend Trade | 1 Min Strategies (Premium).

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.

Welcome to NYMEX WTI Light Sweet Crude Oil Futures.

Subscribe to Oil Trading Platform:

Standalone Oil Algorithm Newsletter (Member Charting Updates Distributed Weekly).

Real-Time Oil Trading Alerts (Oil Trade Alerts via Private Twitter Feed and Discord Private Chat Room).

Oil Trading Room / Algorithm Newsletter / Alert Bundle (Weekly Newsletter, Trading Broadcast Room, Chat Room, Real-Time Trade Alerts).

Commercial / Institutional Multi User License (for professional trading groups).

One-on-One Trade Coaching (Via Skype or in person).

Click here to find all information and pricing on Oil Newsletter, Trading Chat Room, Oil Alerts and more.

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, Trade Alerts, Trading, Oil Trading Room, Strategy, Signals, Shorting, Support, Resistance, Reversals, USOIL, WTI, CL_F, USO

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