Creating a Crude Oil Trading System That Works
When creating your own oil trading system, there are a few things to keep in mind. Your oil trading strategy needs to be able to spot new Oil Trading market trends, while at the same time making sure you don't to get faked out/whipsaws. The real trick is, once you have created a oil 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 is good to know in what chart time-frame you are going to be working in, and how much you are willing to risk once you start oil trading online. All these factors should be factored in, & should be written down within your oil trading plan. A good place to test this oil trading plan would be on a free practice trading account. This is where you test your oil trade strategies risk-free without investing money to determine which oil trading strategy is best suited for you.
So, now how can a trader like you come up with a "good oil trading system" or the "best oil trading system"?
To come up with a good trading strategy the first thing to do is to define your aim or goal:
The following example illustrates a goal & explains the oil rules of how to achieve that goal
Oil Trading Goals
1.Identify a new oil trend
Moving average crossover method oil trading strategy is the most commonly used strategy to identify a new oil trend. The 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 technical indicators to confirm a Oil Trading trend.
Indicator based Trading System
The best type of a oil trading method 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 Oil trading system:
- Find entry points as early as possible.
- Find exit points securing maximum gains.
- Avoid fake entry and exit signals.
- Proper Crude 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 are going to be when entering & exiting a trade. Those traders who are more aggressive wouldn't wait until oil chart candle closes and 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 method that will generate profitable crude oil signals. You need to have your own oil 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 website provides you with all the oil tools required to help you and guide you on how to create your own oil trading systems.
Below is an example of a Oil trade system based on RSI, MACD and Stochastic.
Oil System - Best MT4 Examples Trading Systems
The trading system example above is comprised of four technical indicators in total, all of these generate Oil trade signals using different methods, the moving average will generate crude oil signals using the moving average crossover method 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 Oil Trading signals is discussed in the next topic (on the sidebar navigation learn tutorials menu under key concepts).
For beginner traders, it's difficult for them to create their own oil trading strategies since they don't have a lot of knowledge about the crude oil market. However, this learn oil trading site will explain how a beginner trader can create their own free oil system in just seven easy steps. Best strategy is the one you come up with yourself and 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 courses 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 and how to back-test the system on a practice demo 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 Method
The moving average indicator cross over method 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 Technique - Moving Average Crossover Strategy
This above trading method is referred to as the moving average crossover method because crude oil signals are generated when two averages cross above or below each other.
Oil Trading System Trading Example - 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 technical indicator (Both Moving Averages Moving Up).
A sell oil signal or a going short trade is generated when shorter average indicator crosses below the longer moving average technical indicator (Both Moving Averages Moving Down).
Example 2: Stochastics Crude Oil Trading System
Stochastic Oscillator technical indicator can be combined with other Oil technical indicators to form a trading system.
- RSI oil trading technical indicator
- MACD oil trading technical indicator
- Moving Averages oil indicators
Trading Systems Oil Trading Examples - Best MT4 Examples 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 downward below center-line
Short signal was generated when all the written oil trading rules were met. Exit signal is generated when a oil trade signal in opposite direction is generated.
The good thing about using such a trading method is that we are using different types of technical indicators to confirm the oil signals and avoid as many whipsaws as possible in the process.
- Stochastic - oil trading momentum oscillator indicator
- RSI - oil trading momentum oscillator indicator
- Moving Averages Crude Oil TradingTechnical Indicator - oil trend following indicator
- MACD - oil trend following oscillator
Based on the chart timeframe used - this strategy can be used as Oil Trading 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.
Crude Oil Trading Chart Timeframe
1 hour oil trading chart
Indicators that identify a new oil trend
Moving Average Crossover Technical Indicators Strategy
Indicators that 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 Crude Oil Trading
Stop Loss - 35 pips
Take Profit Oil Order - 70 pips
Reward to Risk 2:1
Example 4: New Gann Swing Oil Trading Chartist Plan
The Gann Swing Oscillator is meant to be used in combination with the Gann HiLo Activator & Gann Trend to form a complete Oil Trading strategy commonly referred to as the - "New Gann Swing Chartist Plan". Within this methodology the Gann Swing Oscillator is used to help determine oil market swings for trading only within the current market oil trend is shown by the Gann Trend.
Below is example of the New Gann Swing Chartist Plan
The Gann Chartist Plan - Oil Systems - MetaTrader 4 Template Trading System
