Short Term Oil Trading with Moving Averages

Moving Averages Oil Trading Systems

Short term oil trading will use short crude oil price periods such as the 10 and 20 moving average price periods.

In the crude oil trading example explained below we use 10 and 20 SMA to generate Oil Trading signals: the oil signals generated are able to identify the oil trend as early as possible.

Short Term Oil Trading with Moving Averages - How to Trade Oil Trading with Moving Averages Example

Scalper Oil Trader

One of the most widely used method of technical analysis used to analyze oil chart trends in scalping is the use of moving average indicator.

The idea behind this moving average oil indicator is to simply enhance technical analysis before taking a oil signal to enter the crude oil market. Planning and setting oil trading goals in the short term according to moving average indicator helps a scalper oil trader to identify trends in the crude oil market and thus open a oil trading order accordingly.

Most of the oil signals can be established using a specific crude oil price period for the Moving Average Oil Technical Indicator. The oil trading Moving average indicator determines whether the trader will trade in the short-term or long-term. In addition, the crude oil price action is above or below this moving average indicator it determines the oil trend of the crude oil market for the day.

If a large part of the oil market oil price is considered to be below the Moving average indicator, then bias oil trend for the day is downwards. Most oil traders they use the Moving Average Technical Indicator as support or resistance to determine where to open a oil trade position, if crude oil price touches the Moving Average in the direction of the oil market trend a oil trade is then opened.

The oil trading moving averages are drawn and the intersection point with the crude oil price can be used to determine the appropriate entry and exit times in the crude oil market. Since there is always oscillation in the crude oil market trends and the crude oil market will repeat this process of oscillating and bouncing off the MA, this can be used to generate buy or sell oil trading signals.

Simple moving averages are calculated and their approach is based on the observation of the crude oil price within a particular period of time using sufficient data to calculate it. Their interpretation has provided many oil trading scalpers with lots of tips on how and when to open oil scalping trading.

Medium Term Strategy

Medium term oil trading moving average strategy will use the 50 period Moving Average.

The 50 period Moving Average acts as support or resistance level for the crude oil price.

In an upwards oil trend the 50 period Moving Average will act as a support, crude oil price should always bounce back up after touching the Moving Average. If the crude oil market closes below the indicator then this will be an exit signal.

50 Moving Average Period Support - Oil Strategy Example

In a down oil trend the 50 period Moving Average will act as a resistance, crude oil price should always go down after touching the moving average. If the crude oil market closes above this technical indicator then this is an exit signal.

50 Moving Average Period Resistance - Oil Trade Strategies Example

50 Day Moving Average Oil Trading Technical Analysis

As the oil trend moves up, there is a key line you want to watch - this is the 50 day oil trading moving average. If the crude oil market stays above this 50 day oil trading moving average, that is a good signal. If the crude oil market drops below the 50 day oil trading moving average in heavy volume, watch out, there could be oil trend reversal oil signal ahead.

A 50 day MA oil indicator takes 10 weeks of oil market data, and then plots the average. The moving line is recalculated everyday. This will show the oil trend - it can be up, down, or sideways.

You normally should only buy when oil prices are above their 50 day oil trading Moving Average. This tells you the current oil market direction is trending upward. You always want to trade with the oil trend, and not against it. Many oil traders only open orders in the direction of the oil trend.

Oil prices normally will find support over and over again at this 50 day oil trading moving average. Big investing institutions watch this level closely. When these big volume entities spot a oil trend moving down to its 50 day line, they see it as an opportunity, to add to their trade position, or start a new oil trade position at a reasonable level.

What does it mean if oil price moves downward and slices through its 50 day line. If it happens on heavy volume, it is a strong oil signal to sell. This means big institutions are selling their share, and that can cause a dramatic drop in price, even if fundamentals still look solid. Now, if oil price drops slightly below the 50 day line on light volume, watch how it acts in the following days, and take appropriate action if necessary.

Long Term Strategy

Long term oil trading strategy will use long period such as the 100 and 200 MAs which act as long term support and resistance levels for the price. Since many oil traders use these 100 and 200 oil trading moving averages, the crude oil price will often react to these support and resistance levels.

100 and 200 MAs - How to Trade Oil Trading Using Moving Average Oil Trading Strategies

In Oil Trading, traders can use both fundamental analysis and technical analysis to help determine whether oil is a good buy or sell.

In crude oil trading analysis technique, oil traders looking to gauge supply and demand for oil use the 200 day moving average to examine data in different ways.

Traders are most familiar with the basic crude oil trading analysis of the 200 day Moving Average which is used to draw the long term support or resistance level. If crude oil price is above 200 day Moving Average then the oil trend is bullish, and if it is below it then crude oil trend is bearish.

One of the ways to measure supply and demand in oil trading is to calculate the average closing crude oil price over the last 200 sessions. This crude oil moving average accounts for each day going back in time and shows you how this 200 day average has moved.

The reason why the average 200 day Moving Average in particular is so popular in crude oil trading analysis is because historically has been used & it produces good results for trading in the crude oil market. A popular timing oil trading strategy is used to buy when the crude oil market is above its moving average of 200 days and sell when it goes below it.

With this moving average oil indicator, crude oil traders can benefit from being notified when oil price rises above, or falls below its 200 day Moving Average and then crude oil traders can then use their technical analysis to help determine if the oil signal is an opportunity to go long or short.