Thoughts on Crude Oil

General overview

Event types

Trading approach

  • Establish presence of bullish/bearish trend by observing MACD line in 5D/1M/3M view
  • Buy OILU when  90 day MACD trend turns bullish or bullishness gains momentum
  • Sell when OILU when 90 day MACD bullish trend losses momentum
  • Buy OILD when 90 day MACD trend turns bearish or bearishness gains momentum
  • Sell OILD when 90 day MACD bearish trend reverse losses momentum
  • Exit OILD when WTI price drops below USD45
  • Exit OILU when WTI price rises above USD60
  • Enter OILU when
    • WTI USD40-45/barrel – when no deliberate flooding by OPEC+
    • WTI USD26/barrel – when deliberate flooding by OPEC+

Observations on employing trading approach

  • Deliberate market making activities by operator to balance funds on OILD and OILU is disadvantageous for trading.
  • Correlations of ETF prices to actual WTI prices is delayed
  • The bulk of the price action occurs pre-market and post-market during time slots where placement of position is not possible
  • Delays are observed between placing and filling of orders

Related References

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