IF a new bullish impulse is coming. How can I trade it? | USOIL
Today, we will look at one of my favorite assets to trade Crude Oil / USoil or the ticker you like the most.
The main scenario I want to get ready is a possible bullish movement based on the current price action I'm observing.
- Bullish impulse coming from 0 towards 77.5
- 77.5 is a major support resistance that has been working since 2006
- That level worked in two ways in the past every time the past reached it from below. We observed major bearish movements, or we observe choppy conditions on edge with following bullish movements towards prices like 110
Ok, so based on that what can we expect?
Based on the current conditions, I can see a lot of similarities between the current bullish impulse with the previous bullish impulse that happened from January 2009 to May 2010. Even the size of the correction happening right now shares deep similarities with the previous one. That's why I'm thinking about this bullish scenario happening in 2022.
I have looked for several examples in the past to define the current template I will share here regarding how I want to trade it. This is my conclusion.
So, if the price breaks the current correction and makes an 8% to 12% retracement, I will set pending orders on a new high and stop loss below the retracement with a target on the next resistance zone around 110.
Of course, this is not happening right now; that's why patience is very important. Also, remember that we are working with statistics; therefore, the scenario may never happen, which is great because you didn't risk any trading capital. The risk I will be taking on a setup like this is 3% of my trading capital; the risk to reward ratio I will be aiming for is 2.5 (for every dollar I'm risking, I'm looking to make 2.5), And the odds of this setup being right would be around 50% based on my historical results trading this asset and backtesting it.
Thanks for reading! Feel free to share your view in the comments.
The main scenario I want to get ready is a possible bullish movement based on the current price action I'm observing.
- Bullish impulse coming from 0 towards 77.5
- 77.5 is a major support resistance that has been working since 2006
- That level worked in two ways in the past every time the past reached it from below. We observed major bearish movements, or we observe choppy conditions on edge with following bullish movements towards prices like 110
Ok, so based on that what can we expect?
Based on the current conditions, I can see a lot of similarities between the current bullish impulse with the previous bullish impulse that happened from January 2009 to May 2010. Even the size of the correction happening right now shares deep similarities with the previous one. That's why I'm thinking about this bullish scenario happening in 2022.
I have looked for several examples in the past to define the current template I will share here regarding how I want to trade it. This is my conclusion.
So, if the price breaks the current correction and makes an 8% to 12% retracement, I will set pending orders on a new high and stop loss below the retracement with a target on the next resistance zone around 110.
Of course, this is not happening right now; that's why patience is very important. Also, remember that we are working with statistics; therefore, the scenario may never happen, which is great because you didn't risk any trading capital. The risk I will be taking on a setup like this is 3% of my trading capital; the risk to reward ratio I will be aiming for is 2.5 (for every dollar I'm risking, I'm looking to make 2.5), And the odds of this setup being right would be around 50% based on my historical results trading this asset and backtesting it.
Thanks for reading! Feel free to share your view in the comments.
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