Scott Andrews from MasterTheGap.com has a video (link here) introducing the oil market. It’s a nice short (16+ mins) video with some useful information.
Why Trade Oil
- 5-day: 1.77 = $1,770
- 30-day: 2.05 = $2,050
- 100-day: 1.99 = $1,990
- 250-day: 1.95 = $1,950
- 1000-day: 2.40 = $2,400
- Comparatively ATR for ES is around 10 – 20 points, which is around $500 – $1,000 per contract.
- CL – Light sweet crude (1 tick is $0.01 = $10 per contract)
- QM – E-mini for CL
- USO – Tracks light, sweet crude.
- BNO – Tracks Brent crude.
- OIH – Tracks 25 largest oil service companies
- CVX, XOM, COP, OXY, MUR, etc.
Tips on Trading CL
- Volatile times to avoid
- 9.00 – 9.01am EST (pit open)
- 10.30 – 10.33am EST on Weds (inventory report, except for holiday weeks: Thurs 11am EST)
- Orders to use
- Limit orders when entering to avoid slippage
- Stop-market orders when exiting to make sure you get filled
- If for any of the first 3 contract months, the price trades more than $10 away from the settlement price of the previous day, Globex will halt for 5-minutes in all contract months.
- Each monthly contract ceases trading on the 3rd business day prior to the 25th calendar day of each month (usually on the 19th or 20th).
- To do
- On winning trades, let a portion run and trail your stop.