Creating a Oil Trading System That Works
When creating your own oil system, there are a few things to keep in mind. Your oil trading strategy needs to be able to identify new Oil Trading market trends, while at the same time making sure you do not to get faked out - oil trading whipsaws. The real trick is, once you have created a oil trading system that works for you, stick to it. Being disciplined will help you a lot in becoming successful in crude oil trading.
Before trading Oil Trading on a live oil trading account, you have to figure out what oil strategy works for you. It's good to know in what chart time-frame you are going to be working in, & how much you're willing to risk once you start oil trading. All these factors should be factored in, and should be written down within your oil trading plan. A good place to test this oil trading plan would be on a free demo practice trading account. This is where you test your strategies risk-free without investing money to determine which strategy is best suited for you.
So, now how can a trader like you create a "good oil trading system" or the "best oil trading system"?
To come up with the best trading strategy the first thing to do is to define your oil trading objective or goal:
The following examples shows a goal & explains the oil rules of how to achieve that goal
Goals of Oil Trading System
1.Identify a new oil trend
Moving average crossover strategy oil trading strategy is the most commonly used strategy to identify a new oil trend. Time to open a long or short trade is decided when two moving averages indicators cross over or cross under each other.
2.Confirm the new oil trend
Relative Strength Index(RSI) Indicator and Stochastic Oscillator Indicator are the most commonly used oil technical indicators to confirm a Oil Trading trend.
Indicator based Trading System
The best type of a oil trading strategy is one that is indicator-based. You will find it straight forward to generate the oil signals & thus less error-prone on your part and this will help you to avoid market whipsaws.
There are several things we want to achieve when creating a Crude Oil trading system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry & exit signals.
- Proper Oil Trading Money Management Rules
Accomplishing these 4 goals will result in a profitable oil trading strategy that works.
The last piece of information needed, is deciding how aggressive you're going to be when entering & exiting a trade. Those traders who are more aggressive wouldn't wait until oil chart candle closes & would enter as soon as their technical indicators match up. But most traders would wait until the oil chart candle of the chart timeframe they are using has closed, to have more stability when entering a the oil market.
To get profits out of the crude oil market you need to build your own profitable trading system: a strategy that will generate profitable crude oil signals. You need to have your own strategy that will help you achieve your financial goals. Sometimes the best trading systems are the ones that you build on your own. No need to keep searching online for the best trading systems or for oil systems that work, this site provides you with all the oil trading tools required to help you & tutorial you on how to create your own oil trading systems.
Below is an example of a Oil trade system based on RSI, MACD & Stochastic.
Crude Oil Trading System
The trading system example above is comprised of four technical indicators in total, all of these generate Oil trade signals using different strategies, the moving average will generate crude oil signals using the moving average crossover strategy shown, the RSI indicator, Stochastic indicator and MACD indicator use different technical analysis to generate the long and short signals as shown in the above example. How to generate these trading signals is discussed in the next topic (on the sidebar navigation learn tutorials menu under key concepts).
For beginner traders, it is difficult for them to create their own oil trading strategies since they do not have much knowledge about the crude oil market. However, this learn oil trading site will explain how a beginner trader can create their own free oil trading system in just seven easy steps. The best strategy is the one you come up with yourself & learn how to trade the crude oil market with it.
The main advantage of creating your own free oil trading systems is that you'll know how to make profits by yourself - & not rely on other peoples efforts.
In the next lesson located at sidebar navigation learn lessons menu below the oil trading key concepts will show you how to create a oil trading system like the one above, write it's oil trading rules & how to back test the system on a practice practice crude oil trading account before using it on a live crude oil trading account.
4 Examples of Free Oil Trading Systems
Example 1: The Moving Average Crossover Strategy
The moving average indicator cross over strategy uses two moving averages to generate oil trading signals. The first Moving average uses a shorter period & second is a longer period.
Moving Average Crossover Oil Method - Moving Average Crossover Strategy
This above oil trading strategy is referred to as the moving average cross over strategy because crude oil signals get generated when the two averages cross above or below each other.
Oil Trading System Examples - Short & Long signal Generated by Trading System
A buy oil signal or going long trade is generated when shorter moving average indicator crosses above longer moving average indicator (Both Moving Averages Moving Up).
A sell oil signal or a going short trade is generated when shorter average indicator crosses below longer moving average indicator (Both Moving Averages Moving Down).
Example 2: Stochastics Crude Oil Trading System
Stochastic Oscillator technical indicator can be combined with other indicators to form a trading system.
- RSI indicator
- MACD indicator
- Moving Averages oil indicators
Trading Systems Oil Trading Example - MT4 Oil Trading Chart Templates Oil Trading Systems
Short Signal or Sell Trading Signal
How the short sell Oil signal was generated
From our oil rules the short trading signal is generated when:
- Both Moving Averages are heading down
- RSI is below 50
- Stochastic moving downward
- MACD moving downwards below centerline
The short signal was generated when all the written oil rules were met. Exit signal is generated when a oil trade signal in the opposite trade direction is generated.
The good thing about using such a oil strategy is that we are using different types of technical indicators to confirm the oil signals and avoid as many oil whip-saws as possible in process.
- Stochastic - oil momentum oscillator indicator
- RSI - oil momentum oscillator indicator
- Moving Averages Crude Oil TradingTechnical Indicator - oil trend following indicator
- MACD - oil trend following oscillator
Based on the chart time frame used - this strategy can be used as Oil scalping system when the minute crude oil charts are used or as a Oil Trading day oil system when hourly crude oil charts are used.
Example 3: Trading System Oil Trading Example
This trading system is fully explained within the oil trading plan on the oil trading plan lesson on this learn oil site under the Oil Trading key concepts section located on right navigation menu.
Chart Time-frame
1 hour chart
Indicators that identify a new oil trend
Moving Average Crossover Technical Indicators Strategy
Indicators which confirm the oil trend
RSI indicator
STOCHASTIC OSCILLATOR indicator
Long Entry - Buy Signal
1. Both MA(moving averages) pointing up
2. RSI above 50
3. Both stochastics going up
Short Entry - Sell Signal
1. Both Moving Average pointing down
2. RSI below 50
3. Both stochastics going down
Exit Signal
1. Moving Average Technical Indicator gives opposite signal
2. RSI gives opposite signal
Risk Management in Oil Trading
Stop loss- 35 pips
Take Profit Oil Trading Order - 70 pips
Risk to Reward 2:1
MT4 Oil Trading Chart Templates Oil Trading Systems
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator and Gann Trend to form a complete oil strategy commonly referred to as the - 'New Gann Swing Chartist Plan'. Within this oil strategy the Gann Swing Oscillator is used to help determine oil market swings for trading only within the current oil trend is illustrated by the Gann Trend.
Below is the example of the New Gann Swing Chartist Plan
The Gann Chartist Plan - MT4 Oil Trading Chart Template Trading System
