US Oil: A big challenge
US Oil presents some serious challenges for those looking to short this market.
This analysis is time frame dependent. Which way you might want to go depends entirely on trends in respective time frames.
DAILY PICTURE
1. On the daily time frame this is very much a bull market. We can see that in the ATR (amber trendline) and the green Guppy investor zone.
2. On the daily price has made a temporary retreat to near ATR support, in a parabolic limb of the curve.
3. If anything this is usually a place to go long (on this time frame).
4H - FOUR HOURLY PICTURE
1. There is an early trend switch for the south.
2. This is seen on the ATR and SQM (Squeeze momentum).
3. But it isn't as yet a Grade A or Grade B switch.
DECISION-MAKING (Speculative issues)
1. Finding appropriate entry point on a chosen time frame.
2. For a limited hit going long (north) on the 4H, taking a reasonable stop loss and taking only about a 26 or 38.2 Fib retracement of the most recent daily candle.
3. For a limited hit going short (south) on the 4H, a larger stop-loss is required.
4. Possibly going long on the daily and hold out.
As usual before starting any trade on any time frame common things need to be decided:
1. Time frame one will stick to (1D, 4H or something else).
2. Entry position.
3. Stop-loss.
4. Exit position.
Stop-losses on 4H and less need to cater for short spikes in price. So simply saying 2.5 times ATR may not be enough.
Based on experience only of US Oil, I can expect a recoil up on the 4H but of course, I can't predict how much. As mentioned above I can expect at least a 26% Fib on the length of the last daily candle. Expectation is not prediction.
Declaration: This post is for educational purposes only. Nothing here is intended as advice. Your losses are your own should you still construe this as advice, act on it, and lose money.
This analysis is time frame dependent. Which way you might want to go depends entirely on trends in respective time frames.
DAILY PICTURE
1. On the daily time frame this is very much a bull market. We can see that in the ATR (amber trendline) and the green Guppy investor zone.
2. On the daily price has made a temporary retreat to near ATR support, in a parabolic limb of the curve.
3. If anything this is usually a place to go long (on this time frame).
4H - FOUR HOURLY PICTURE
1. There is an early trend switch for the south.
2. This is seen on the ATR and SQM (Squeeze momentum).
3. But it isn't as yet a Grade A or Grade B switch.
DECISION-MAKING (Speculative issues)
1. Finding appropriate entry point on a chosen time frame.
2. For a limited hit going long (north) on the 4H, taking a reasonable stop loss and taking only about a 26 or 38.2 Fib retracement of the most recent daily candle.
3. For a limited hit going short (south) on the 4H, a larger stop-loss is required.
4. Possibly going long on the daily and hold out.
As usual before starting any trade on any time frame common things need to be decided:
1. Time frame one will stick to (1D, 4H or something else).
2. Entry position.
3. Stop-loss.
4. Exit position.
Stop-losses on 4H and less need to cater for short spikes in price. So simply saying 2.5 times ATR may not be enough.
Based on experience only of US Oil, I can expect a recoil up on the 4H but of course, I can't predict how much. As mentioned above I can expect at least a 26% Fib on the length of the last daily candle. Expectation is not prediction.
Declaration: This post is for educational purposes only. Nothing here is intended as advice. Your losses are your own should you still construe this as advice, act on it, and lose money.
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