June 13-17,2016 – FX Trading Plan for Oil

Just like all traders, when I trade with a plan, I’m less emotional and I end up winning.  So I told myself since my logic in analyzing charts work well on a historical backtest, I just simply need to lessen my “rodeo ways” of trading when I see a candlestick pattern in a 15 minute chart, and simply stick to my carefully analyzed charts – just like how the USDCAD trades last week went.

You can check my pre-meditated trades on USDCAD last week and it’s essentially easier to trade when you meditate and have already planned your trade.  Next thing I just need to learn is to hold on to my trades as long as I can via better use of trail stops.

usdcad trade 2usdcad trade june

*****

My trade analyses this week will focus on US Oil.

We first look at the weekly structure:

weekly.png

On a weekly note, We can see that Oil has rallied from a low of 26 this year to a recent high of 51.63.  Essentially a 100% upmove in a span of 6 months.

Note that oil weekly had a breakdown of an important support line of 76.96= This is a multi year support in 2010, 2012, 2014 that was broken down and will now be a multidecade resistance.  For any oil bulls out there – I will not dare think that 26 can rally to 76 just without a fight.

Superb for the bulls to rally to the midpoint.  However, it’s a wonderful place for a trader and a position trader to sell into.  I actually sold oil last week at 51 but since I wasn’t trading with a plan, I covered with a 50 cent gain.  I’ll try to reenter this week with more oil shorts.  The reason is simply risk reward.  Here’s a daily chart.

You can see that Oil bears dominated the entire week.  5/5 days were bearish candles.  there’s a temporary doji at the 0.236 zone of 47.95 but I’m betting this will get smashed this week and still drop all the way down to midpoint range of 44.35-43.15

oil bear

I am super bearish on oil such that any rallies within this week 49.16-49.52 ; I will gladly take it and keep selling this commodity.  Risk of stoploss at 50.25/50.61 but reward is 44.35 or a 5 dollar gain versus only 50cent or 1 dollar loss shows me this really passes my risk reward position trade.

bear oil

 

Basically keep on selling oil all day long.  Sell oil. Sell oil.  Sell oil as high as you can.  I hope my sell order limits get done within the week 🙂

basically keep.png

Wednesday Event for Oil – 830pm we have CAD Manufacturing sales

 

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