How to Generate Oil Trading Signals With Oil Trading Systems
Crude Oil Trading MetaTrader 4 Signal Indicator
The only method of oil trading is through crude oil trading signals, It is best to learn how to generate these oil signals for yourself, this way you do not have to rely on other traders to generate them for you.
Generating oil signals isn't easy & requires you to have a lot of crude oil trading analysis knowledge & experience, but the earlier you start practicing how to generate these oil signals for yourself the better it's for you.
A good method of how to practice generating oil trading signals with oil trading systems is to open a free practice Oil Trading demo crude oil trading account and test your trading signals on this practice account risk free without risking your money, then once you have tested your oil trading strategies & they are profitable on the demo practice account you can the use these oil trading signals on a live crude oil trading account.
The method of how to practice generating these oil signals as well as how to back test the oil trading signals on the demo oil account using the MetaTrader 4 crude oil trading platform is discussed below:
So, How Can a Trader Generate Oil Trade Signals?
The best method of generating oil trading signals is through oil systems, You can Learn how to come up with oil trading systems from the lesson how to create Trading Systems on the right navigation menu under the tutorials Oil Trading Key Concepts.
A crude oil system is a combination of one or two or more technical indicators with written trading rules of how these indicators will generate these oil signals.
Take an example of the simplest trading system or strategy known as moving average crossover method. A buy oil signal or sell oil signal is generated when there is a cross-over of the 2 moving averages: either a buy oil signal for an upward moving average crossover or a sell oil signal for downwards trend.
Generating Crude Oil MetaTrader 4 Free Signals - Oil Trade Signals MT4 Indicator Strategy Moving Average Crossover Method
The trading system example explained below shows a oil trading system using the above moving average strategy combined with the RSI and MACD technical indicators to generate buy and sell crude oil trades.
Example of Generating Crude Oil MetaTrader 4 Free Signals - Oil Trade Signals MT4 Indicator Strategy
When it comes to generating buy and sell crude oil trading signals, crude oil traders should use simple oil trading systems to generate these oil signals.
Generating Crude Oil MetaTrader 4 Free Signals - Oil Trade Signals MT4 Oil Trading Indicator Strategy - Buy & Sell Trading Signals
Generating Crude Oil Trading MetaTrader 4 Free Signals
An example of a simple oil system that works, is one that's a combination of:
- Moving average crossover strategy
- RSI
- MACD
The written oil trading rules are:
Generating Oil Trading Signals Strategy - Oil Trading System Examples
Oil Trade Rules:
Buy Oil Signal is Generated when:
- Both Moving averages going up
- RSI value above 50
- MACD above center line
Sell Oil Signal is Generated when:
- Both Moving averages going down
- RSI value below 50
- MACD below centerline
Generating Buy and Sell Oil Trades - Examples of a Strategy
Exit Trading Signal
Exit trading signal is generated when MA, RSI & MACD indicator give a signal in opposite direction.
The chart timeframe to use is 1 hour chart timeframe or 15 minutes oil chart timeframe depending on what type of trader you are.
For a beginner trader the above written trading rules will give good buy and sell oil signals, the only thing which a trader needs to do is to have the discipline to follow the written oil trading signals rules the exact way they are, and wait for a buy or sell trade transaction to be indicated by your oil strategy & trade after the signals have been generated, not before they are generated.
Back Testing
Generating Trading Signals with a trading system is one of the easiest method to trade oil , it is the best way that a oil trading beginner can attempt to determine the direction of the market oil trend with a good level of accuracy, and with a little backtesting on practice trading account so as to gradually increase the level of accuracy of this oil trading signals strategy
The best way to back test a oil strategy is by following these two steps:
- Oil Trading Paper Trade
- Crude Oil Demo Trade
Oil Trading Paper Trading - This method of testing a oil system involves placing your trading system on the oil charts, then take the chart back to a particular date, 3 months back for example, and then using this chart history to determine where your oil trading strategy would have given buy, sell and exit crude oil signals. Write down these points and the profit per trade transaction on a piece of paper and then calculate the total profit after you have recorded a good number of crude oil trades such as 50 paper trades oil trading transactions and determine if your trading method is overall profitable, the win ratio, the loss ratio and the risk:reward.
This is an ancient method of testing oil trading systems which was used by traditional traders when there was no online oil markets or computers for that matter, the trader would use something like the A3 or A2 paper, graph format paper and draw the charts manually (Imagine plotting the charts on your oil trading platform by hand every day or every hour, would you be ready to do that? I doubt) Those investors were hardworking than most, some were so used that they still continue to paper trade the online oil market and draw the oil charts on paper, anyway for our paper method example, just a sample data of 50 trade transactions is all we need.
A good oil tool to use to back-test your crude oil trading system is known as the MT4 Oil Step by Step Tool. Found on the MT4 crude oil charts toolbar of MT4 crude oil trading platform, If you want to find the oil charts toolbar on the MetaTrader 4 platform it is at the top of MT4 crude oil trading platform. If it is not: Click View (next to file, top-left corner of MT4)>>> Tool Bar >>> Charts. Then click the Customize button >>> Choose Oil Step by Step >>> Click Insert >>> Close.
MT4 Oil Platform Chart Tool-Bars - How to Trade Oil Trading For Beginner Traders
MT4 Oil Trading Chart Tool Bars - Oil Step by Step Button Key for Back Testing Oil Systems Discussed
Once you get this MT4 tool you can move your oil chart backwards, & use this MetaTrader 4 tool to move the charts oil trading step by step while at the same time testing when your oil trading system would have generated either a buy or sell trade transaction, & where you would have exited the trade, then write down the amount of profit/loss per oil trade transaction and out of a sample number of oil trading transactions you would then calculate the overall profits/losses generated by the trading strategy.
If your oil trading strategy is profitable on the paper then, it's time to demo crude oil trade and testing if the it is profitable on real market as it's on paper technique. This is the process of testing or back-testing a trading system.
Writing a Crude Oil Trading Journal
Maintain a Oil Journal to keep track of profitable oil trades, & determine why these trades were profitable. And also keep a log of all losing trades, determine why these trades made a loss and the avoid making these same mistakes the next time you trade using your strategy.
Tweak your oil trading system until you get a good risk: reward ratio, with the oil trading signals that you generate. Aim for a good risk: reward of 3:1 and a win ratio of above 70% is a good ratio, with good oil trading money management even a oil trading strategy with a win ratio of even 30% i.e. Less than half of your oil trading transactions make profit you can still make a profit. You might want to read this topic to know what the table below is all about: Risk : Reward Ratio.
Risk to Reward Ratio Chart of Oil Trading Money Management Strategy - Oil Trading Strategies Explained
Read Oil Money Management Methods Guide
A manual oil trading system is still the best way to generate oil signals compared to automated trading systems, a manual strategy is a better technique and is also much simpler to implement.
However, other traders prefer automated oil trading systems and for those then they can check the information on this page MQL5 Oil Expert Advisors & automated oil trading systems.
You can also view our extensive list of oil trade strategies topics that provides you with various methods of buy and sell technical analysis using a number of diverse technical methods, navigate to the Oil Trading Strategies Section.
