Crude Oil Trading

[rsh01]

I did trade CL cal spread (flys/condors) for about a year (approx first 2 years of the curve) but it was during the spring rising and the volatility became too great for the cost of the trade ($1+ a side - so for a fly it wld cost you $4 entry + $4 exit with 1tick = $10 so net $2 gain - so really needed 3 ticks). It used to be tight mean reverting ranges (2005-2010) - 20ticks max, but some of the months (often a fly with a quarter month in it - which is most) cld spike 50-100ticks easily in a cpl of days. So it wld take on the characteristics of an outright yet the cal spdread flow didn't correlate to the movement in the underlying (it did up to early 2011) - the curve cld pivot from contango to backwardation easily (I searched for months on literature which might explain the curve shifts but there's limited available from what I found, if anyone else can provide some sources I wld be intrigued to learn more). With a decent exchange rebate we were only just breaking even with broker costs of up to 50k a mth, it became impossible (for me) to trade it, and by this time I had already started trading outrights. From what I have heard things haven't changed much, cpl of guys still trading it but just treading water, downsized massively and limited averaging which has cut into a big part of their monthly income - the rebates.

There's much better energy related trades to be looking at for an income.

I worked at a prop firm so they provided the margin which was over 100k most days, though I was trading a cpl of years of the curve.

Why the interest in CL cal spreads?

 

[moka2]

Thanks for some meanful discussion rsh01
I am not a pro trader as you seems to be so some of my questions and explanations could be wrong!
Out of fear of outrightvolatility I thought spreads are less risky! and market neutral ( depends upon capital deployment )
So started looing in to them , I know people tade Agri spreads like outright
any way I satrted loking at Eurodollar and Oil spreads as less amrgin hungry and see if smal ticks can be achieved
chalanges I se are
1) DO they move enough to make any money specially 1-2 near month
2) Platform and FCM who wil give proper exchaneg SPAN margin
3) Low coms ( at the moment I can see min = USD 0.5 per leg per side so to RT a spread = $2 + exchnage fees aganist the possible profit of only 1 tick = $10 per spread
4) a plaform which is not too expensiev and can chart a exchange recognised spread properly!

and last how can one hedge the Cal spread? if it goes against you
A- using CSO Calnder SPread Options .. they do exist but not liquied at all it smmes
B - one person mentionedthat if a Cal lspread goes aginst you convert it in to a butterfly.. I am still trying to understand how woudl that work in payout terms?

Perhaps better if we PM
MK

 

[moka2]

Sorry about all typos

 

[rsh01]

Sorry about all typos

have pm'ed you.

 

[mrudik]

Thanks very much for your extensive reply, rsh01.

1. Indeed there is so much free material on the web (CME web 4 exmpl), I just wanted to take the course as I am going to Singapore anyway and useful it would be to network with real people interested in the issue, yes, with perspective to get a job in prop trading or energy Co (not sure yet).

2. For knowledge, yes, I dont mind to hear about freight as I aim to widen my trading scope to the whole energy sector in progress.

3. Would like to trade using a bit of both FA and TA, however both may fail, if the price is manipulated )). As for now, it would be position trading (coz it works for me on FX i.e. USDRUB) using futures and options (sorry, really dont know yet if it makes sense to use them simultaneously) and high volatility would be tackled with smaller leverage.

4. Good idea to ask the course director some questions, thx!
Honestly, i have difficulties navigating here on t2w forums, searching the forums is a mess... could not find 'First steps' section to duplicate my post there ...
What oil trading journals titles would you suggest please?

Thanks in advance and have a great weekend!

Hi Mihail,
no idea about the ice course, sorry. you can learn about futures & options for free on many places on the web, as too with strategies for trading oil.....which are similar to strategies for trading any of the major instruments (fx, equities, commods, FI et al). successful traders scalp, swing & position trade oil using tech analysis & fundamental analysis, just like any other market. looking at the course structure there looks to be a lot of fluff (eg "Forward curve analysis") which may or may not be of relevance & can be found using google, will take you longer but will be free.

also....
"MODULE 3: Hedging to Save Money

Strategy Workshop: End User, Producer, Utility, Physical trader scenarios

Case Study: Freight rate trading and hedging"

....I am not sure this has any relevance to retail traders? OK for knowledge, but will it help you trade any better? (unless you are loaded and want to trade physical, or want to trade for an energy company).

Do you know yet if you want to trade using FA, TA, or a bit of both (or neither)? What time frame? Do you know what type of instrument you want to trade - physical, futures, options etc? Why do you want to trade oil? You may find that the more volatile nature of the market doesn't suit you. Maybe you can ask the course director some questions prior to making a decision? (btw your post is better off in the "First steps" section).

Basically theres a lot to learn about trading which is generic across most instruments, imo i wld learn as much as i can for free online to get a view on what i want to trade and why (sorry if you have already done this), also looking at various trade journals on oil (i dont see many brent crude outright trading journals, mainly crude light) and if theres knowledge gaps which cannot be filled & which wld clearly improve my skills as a trader only then wld i consider looking into paying for a course. by then i wld hope to narrow down exactly what i need to learn - it wld be very specific, unlike this or most other courses. but the main gap i have found to be an obstacle in becoming a good trader is in experience (being mainly screentime for me) , which is always free, just v time consuming. All my opinion, of course.

And fyi, oil pricing is fixed (shock horror), so i wld be interested to hear what ICE have to say about Total's comments on the fixing, and how best ppl like you and me can position ourselves to make money out of a rigged market......

Total warns over ‘inaccurate’ benchmarks - FT.com

if the FT link requires you register heres another article...
LIBOR-gate Comes To Crude: Total Exposes Price Fixing In The Energy Market | ZeroHedge

g/l.

 

[MDunleavy]

I think it's quite possible ...

 

[rsh01]

I agree...a lot of space below here.

 

[rsh01]

CL 8450 next support level for long trade

 

[teamwk]

Hi,

I am trading crude oil for about a year. Has been profitable. Who's trading the crude oil as well? I am looking for someone to exchange experience. Send me message.

Hi

I do trade oil, that is Crude and Brent oil.
Please lets keep in touch. I think we can share a lot of VERY profitable strategies this market has taught me in the past 18 months. Its a crazy market but it can be tamed easily just by using dead simple techniques.

Hope we get in touch.

 

[nashh]

Hi

I do trade oil, that is Crude and Brent oil.
Please lets keep in touch. I think we can share a lot of VERY profitable strategies this market has taught me in the past 18 months. Its a crazy market but it can be tamed easily just by using dead simple techniques.

Hope we get in touch.

i trade cl WTI, good at it, wanna echange ideas etc. [email protected] or royce brival FB

 

[.Bear.]

Hi all

I'm new to the forum but have been studying us crude oil for 2 years.

I'm currently looking for a new spread betting broker with decent charts. Also does any one know of a broker who's charts have the indicator CDHLO (current day high low).
This is the only indicator I use it saves me moving the drawn line all the time.

My strategy is to just read the charts and trade the big push in-day trading. I have a 20pts stop then add the spread, with a limit of 100pts then - the spread. I get on average 2 a week

Been away for while just had a baby so getting ready to start trading again.

Chees all

 

[.Bear.]

I think oil will close lower today.

Might not make it past 95.50 wont know until we see how the market moves.

 

[shanemort]

Exchanging Ideas

Hi im trading crude also for a few months now and doing well, interested to her about peoples systems and share mine.

hit me up on email [email protected] or skype = shanemort

Thanks

 

[DuCaan]

Crude traders, think crude might have hit some solid support, formed a bullish harami pattern on the daily.
Nice pattern: http://marketchartpattern.com/commo...key-support-technical-analysis-14-march-2014/

 

[Tradersonflow]

Crude oil expert. Yup. Hit me up if you need to say what sup

 

[piphoe]

light sweet crude.

200 yrs from now be like "bright light solar"

of course we won't be around to play that contract.

make hay while the suns shining,

 

[piphoe]

trading oil is like trying to grab hold of the end of a 2inch firehose..

that's whipping back & forth

your getting slapped in the face

with each try

:/

 

[hasanalali]

weekly oil chart





view $80 is the key price in the trend

 

[mpups]

Trading in crude oil is very interesting and profitable. I am trading in crude oil for few months and I am doing well. However, its value is very fluctuating and one need to be updated with its status before trading.

the crude oil facebook status? please can you link to the page. thanks

 

[fxstrategist]

Bullish breakout on oil

On the daily chart of WTI oil we can see that the price has broken above the 72.00 level and if it keeps its bullish momentum, it may reach the 75.00 level. On the same chart we can see that the zone between the 72.00 level and the 75.00 level has been a consolidation zone in the past. Therefore, the price may get stuck in the current area. On the other hand if it falls below the 72.00 level, WTI oil will be leaving behind a false breakout and its next support could be the 70.00 level. Another possible scenario is that the price could form a breakout-pullback pattern around the 72.00 level to continue higher.