A simple, yet profitable trading system to trade oil.
The system consists of 2 trend following indicators, one long-term and one short-term.
The main goal of this system is to capture profits in an existing trend, defined by the long-term trend following indicator.
The short-term indicator generates the oil trading signals.
Here’s an example of how to use it on a daily chart.
Feel free to experiment on other time frames, such as the 5 minute chart.
Used MT4 indicators: ArrowsAndCurves.ex4 (default settings), RSIFilter.mq4 (default settings)
Preferred time frame(s): any
Recommended trading sessions: London and US for time frames below the 30 min chart. Any session for time frames above the 30 min.
Instruments: Brent Crude Oil (BCO/USD), West Texas Oil (WTICO/USD)
Example: Oil Daily Chart
The figure above is an example of the oil trading system in action on the daily chart (click the chart to enlarge).
The oil chart shows our proposed buy and sell entry points (dotted blue line shows the valid signals).
Learn the easy trading rules below.
Oil System Trading Rules
- RSIFilter indicator paints orange color (trend up)
- ArrowsAndCurves indicator draws blue arrow
==> Open long oil position. Set stop-loss slightly below the most recent support level.
Take profit: Take profit at risk-to-reward 1:2 or higher. Alternatively, close long when the ArrowsAndCurves indicator draws red arrow (short-term bearish).
- RSIFilter indicator paints blue color (trend down)
- ArrowsAndCurves indicator draws red arrow
==> Open short oil position. Set stop-loss slightly above the most recent resistance level.
Take profit: Take profit at risk-to-reward 1:2 or higher. Alternatively, close short position when the ArrowsAndCurves indicator draws blue arrow (short-term bullish).