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Crude Oil

Crude Oil Analysis: Bullish Momentum Expected After BreakoutCrude oil has recently encountered resistance and experienced a pullback from this level. However, it is currently trading within an ascending channel, suggesting that the bears are losing momentum, while the bulls are gaining control of the market dynamics. Key Observations: 1. Resistance Encounter: Crude oil faced resistance at a significant level, prompting a temporary retreat. 2. Ascending Channel: The price action is confined within an ascending channel, indicating a bullish bias in the market sentiment. 3. Breakout Confirmation: Notably, the price has broken and closed above the critical resistance level of 83.00, signaling a potential shift in momentum towards the upside. Anticipated Move: - With the breakout above 83.00, I anticipate a continuation of bullish momentum in the near term. - The breakout suggests renewed strength in the market, potentially leading to further upside movement. - Bulls are likely to dominate as the momentum shifts in their favor, with potential targets being the next resistance levels. Trading Implications: - Consider long positions or bullish strategies in anticipation of the upward momentum. - Implement risk management strategies, including stop-loss orders, to mitigate potential downside risks. - Monitor price action for confirmation and adjust trading plans accordingly based on evolving market dynamics. Overall, the breakout above the resistance level of 83.00 suggests a bullish outlook for crude oil, with the potential for further upside movement in the near term. --- Share your thoughts in the comments and support the analysis with boost thanks for the follow.
EASYMARKETS:OILUSDLong
by Forex_Haleh_signals_professor
1
CL WTI Crude Oil ShortMy weekly bias is for price to trade up to previous weeks highs, but Mondays price action has me leaning towards a pullback before we trade up mid/late week. Today's candle was quite bearish, so I am looking for price to trade down to Monday's lows, and possibly trade into the untapped lows from several daily candles formed last week. I want to see price trade into and respect a bearish premium array to trigger me to look for short entry on m5/m15.
NYMEX:CLJ2024Short
by Tradius_Trades
USOIL getting positioned for more gains? Yesterday, OPEC and its allies announced plans to extend a voluntary oil production cut of 2.2 million barrels per day through June 2024. Currently, the USOIL trades near $80.20 per barrel, and its structure is undergoing a significant change. Since late November 2023, the USOIL has traded predominantly sideways between $70 and $80 per barrel. However, last week, it broke above the resistance at $79.25 and established a new high in more than three months. By doing so, the USOIL formed an ascending channel, which is a bullish structure. In addition to that, the ADX started to tick slightly higher on the daily chart, suggesting the trend might be gaining bullish momentum. On top of that, technical indicators (on the daily chart), including RSI, MACD, and Stochastic, all turned to the upside, which is yet another bullish sign. Finally, it looks like the USOIL might be awakening and getting positioned for more gains in the short-term and medium-term future. Illustration 1.01 While OPEC and its allies are cutting oil production, the United States is doing the opposite; in fact, the U.S. crude oil production rose approximately 10% in 2023. Technical analysis Daily time frame = Bullish (weak trend) Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.
TVC:USOILLong
by Tradersweekly
6
USOIL Trading IdeaBased on Simple Technical Analysis ( Trendline + Support & Resistance ) Risk Disclaimer: Please be advised that I am not telling anyone how to spend or invest their money. Take all of my analysis as my own opinion, as entertainment, and at your own risk. I assume no responsibility or liability for any errors or omissions in the content of this page, and they are for educational purposes only. Any action you take on the information in these analysis is strictly at your own risk. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Good luck :-)
FX:USOILLong
by ShahedZare
Crude Oil WTI - Analysis (ICT)Simple analysis on the Monthly timeframes. There is trendline liquidity residing above, which I believe is the next draw on price. With that in mind, I noticed price react nicely off of a 5-Month FVG and Orderblock. With that in mind, I'm anticipating price using the current Sibi that it is in to become an iFVG. I would like to see a Monthly candle close above it and then use it or a created Bisi as support to trade higher. Life is simple, don't complicate it. - R2F
NYMEX:CL1!Long
by Road_2_Funded
USOIL | POTENTIAL BREAKOUT IMMINENTUSOIL finds itself at a critical juncture, facing a formidable horizontal resistance level at 79 that has proven unyielding since November 2023. However, a noteworthy development is underway as it sustains its position above the DEMA100 for the first time since October 23. Furthermore, there is discernible formation of an inverted head and shoulders pattern within the confines of the 79 resistance zone. This pattern typically signifies a bullish reversal, hinting at the possibility of a breakout. To confirm the bullish momentum, the bulls need to achieve a daily close above the 79 mark, which would effectively unlock potential upside opportunities. It goes without saying that maintaining a stop-loss level below 76 provides a prudent safeguard for any long positions. Additionally, the EMA100 serves as a dynamic trailing stop-loss indicator, aiding in managing risk effectively.
TVC:USOILLong
by TradeTrio
WTI. Expecting and Suggestions about it.Good day. WTI. Last month showed interesting upward and downward movements; in anticipation, everything closed for an upward movement. Due to the instability in the Middle East and lower Africa, and indeed in the world, these factors influence more likely the Growth of Oil, but let's move on to the Technical Picture. Since the beginning of the year it is trading above 10% growth. The 10% level is the closing price of the year - 71.65 = 78.81. Next we have the expected levels of 15 and 20% growth - 82.39 and 85.98. Looking at the 1Month Charts, we see a picture of the absorption of December trade into January. Moving on to Weekly - We see that since the week of January 29 it has been trading in this range (Inside Bar itself is a very strong combination) and it is breaking through upwards. That's why she says growth. The support level remains at 78.81, if suddenly there is a false breakout. Next, we see that Exponential Averages say that the price passes the Annual from bottom to top, and the Quarterly and Monthly are lined up at an Angle in growth. Further, using Donchian, building a corridor of Highs and Lows for the period, and we look at the quarterly range, which breaks through at the Highs level at 79.62. Therefore, the Course for this month is clear. For the most part, 80% expect growth, depending on the Situation. Thank you all. Goodness and Peace to all
NYMEX:CL1!Long
by OpnTrader
a daily price action after hour update - oilGood evening and i hope you are well. Quote from my weekly outlook: short term: slight favor for the bulls to reverse Friday and trade above 79, there could still be resistance if bulls won’t push above with some force. bears win below 75 for at least 74 or lower That outlook was good for 300 pips. Hope you made some. bull case: Bulls got exactly what i have laid out. 79.62 was the high before many took profits and bears shorted aggressively. Bulls bought the bull trend line right under the 1h 20ema and to me that’s bullish because bears could not get lower lows. I expect bulls to trade back up, as long as it stays above 78. Target is still 80. bear case: Bears sold the highs and reversed the big breakout but until they break below the bull channel under 78, they have to cover and wait for higher prices again. short term: sideways to up for 80 and invalid below 78. medium-long term: same as last weeks. sideways inside the big triangle, above 80 odds favor bulls to get to the upper bear trend line around 82-84 trade of the day: buy 78 and sell 49 when the big bars were forming or buy/sell at the bull channel lines
NYMEX:MCL1!Long
by priceactiontds
Futures market backwardation suggests a sluggish outlookDefying our expectations, the West Texas Intermediate crude oil rose above $75 and began to form a rectangle pattern between $76.16 and $79.25 (following a breakdown of negotiations between Israel and Hamas). Currently, the USOIL is trading near the lower bound of this range, which also coincides with the 20-day SMA that acts as an alternative support level. On the daily timeframe, the MACD performed a bearish crossover, and RSI with Stochastic reversed to the downside. Simultaneously, the ADX continued lower, indicating a lack of any trend. Yet, despite that, the futures contracts continue to trade backward, which suggests the market’s sluggish outlook for the oil’s future price. Illustration 1.01 Illustration 1.01 shows the USOIL’s daily chart and simple support/resistance levels. Illustration 1.02 The MACD line and signal line performed a bearish crossover. However, they are still within the bullish area above the midpoint. Technical analysis Daily time frame = Neutral Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.
TVC:USOIL
by Tradersweekly
A Renko Trading Strategy - Part 7Part 7: Some Examples of Analysis with Indicators First, let’s look at some of the key indicators that are included in the charts. Regardless of the brick size (10,25, or 50), all charts will have the same configuration. DEMA (12-period and 20-period) : These moving averages are designed to react more quickly to price changes than a traditional simple moving average (SMA). The 12-period DEMA is black, and the 20-period DEMA is red. We would look for the 12-period DEMA to cross above the 20-period as a potential bullish signal and below as a bearish signal. As you examine the charts going forward, pay close attention to these two when comparing them to the dynamics of the brick patterns. SMA (20-period) with Blue Dots : This moving average is plotted with blue dots and provides a visual indication of the longer-term trend. It's smoother and slower to react to price changes compared to the DEMA. WMA (9-period) on the 20-period SMA (Purple Line) : The WMA is used to confirm trends and reversals. When the WMA is above the SMA, it may indicate an uptrend, and vice versa for a downtrend. In terms of support and resistance, Renko bricks make it easier to spot these levels as they smooth out minor price fluctuations. Support and resistance would be identified by areas where the price has repeatedly reversed direction. When comparing the 12 and 20-period DEMA to the Renko bricks, look for areas where the DEMAs act as dynamic support or resistance to the price action indicated by the bricks. Similarly, the 20-period SMA and the 9-period WMA would be assessed for their interaction with the Renko bricks. For breakout patterns, we would look for a consolidation of Renko bricks, indicated by a tight clustering of bricks without clear direction, followed by a breakout above or below this consolidation with a corresponding move in the moving averages. Let’s identify any notable patterns or signals on the chart. We will look for: Crossovers between the DEMAs The relationship between the DEMAs and the Renko bricks Potential support and resistance levels Any consolidation patterns that might indicate breakout points The Average Directional Index (ADX) is used to determine the strength of a trend. The value of 35 that is used is higher than the standard 20 or 25, which implies the reduced noise in Renko charts. Here’s how you might interpret the ADX in conjunction with the DI lines: Consolidation : If the ADX is dropping and has crossed below the 35 level, it may indicate that the trend strength is weakening, suggesting a period of consolidation or range-bound market. ADX Below DI Lines : When the ADX drops below both the +DI (positive directional indicator) and -DI (negative directional indicator), it further suggests that neither buyers nor sellers are in control, reinforcing the consolidation signal. Watching for a Trend Change : If after dropping, the ADX starts to turn upward while below the DI lines, it could be an early sign that a new trend is starting to form. The direction of the trend would be indicated by which DI line the ADX crosses. If it crosses the +DI, it may signal the start of an uptrend; if it crosses the -DI, a downtrend might be beginning. To apply this to your Renko chart, you would look for periods where the ADX dips below 35 and pay attention to its direction relative to the DI lines. You'd also consider the brick color change on the Renko chart for confirmation of trend direction if the ADX starts to rise after the dip. Keep in mind that technical indicators should not be used in isolation; they are more effective when used in conjunction with other analysis tools and techniques. Renko charts themselves filter out smaller price movements, so the ADX on a Renko chart might not react the same way as it would on a traditional candlestick chart. Here's some ideas on how to analyze and correlate the given indicators to price action: Renko Bricks : Renko charts focus on price changes that meet a minimum amount and filter out minor price movements, thus highlighting the trend over time. A 50-tick Renko chart will only print a new brick when the price moves by 50 ticks, thereby smoothing out minor fluctuations and making trends easier to spot. The 1-hour timeframe means that each brick represents an hour's worth of price movement. Linear Regression Channel (1st and 2nd degree) : This tool is used to identify potential support and resistance levels and the overall trend direction. The 1st degree (linear) regression trendlines show the mean price movement, while the 2nd degree could show a parabolic trend which accounts for acceleration in price movement. The price often oscillates around the mean trendline, and deviations can be used to identify overbought or oversold conditions. Double Exponential Moving Average (DEMA) 12 and 20 : The DEMA is a faster-moving average that reduces lag time compared to traditional moving averages. In your setup, the DEMA 12 would be more reactive to price changes, potentially serving as a short-term trend indicator, while the DEMA 20 could be used to confirm medium-term trends. Simple Moving Average (SMA) 20 with 9 period Weighted Moving Average (WMA) : The SMA 20 is a common indicator for medium-term trend direction. When combined with the 9-period WMA, which gives more weight to recent prices, you could use crossovers between the two as potential buy/sell signals. Stochastic Oscillators (5,3,3 and 50,3,3) : Stochastic oscillators compare the closing price of a commodity to its price range over a certain period. The 5,3,3 stochastic is a fast indicator that can signal short-term overbought or oversold conditions. The 50,3,3 stochastic, being much slower, could be used to assess the longer-term momentum of the market. Average Directional Index (ADX) with the Directional Movement Index (DMI) : The ADX is used to measure the strength of a trend, whether up or down. The DMI includes both the Positive Directional Indicator (+DI) and Negative Directional Indicator (-DI), which help determine the trend direction. A rising ADX indicates a strong trend, while a falling ADX suggests a weakening trend. When analyzing the chart, consider the following correlations and insights: Renko and Regression Channel : Look for periods when the Renko bricks consistently stay on one side of the mean regression line. This could indicate a strong trend. If the price breaks through the regression channel, it might signal a potential reversal or a breakout. DEMA, SMA, and WMA : Watch for crossovers between these moving averages. A crossover of the DEMA 12 above the SMA 20 and WMA might indicate a bullish short-term momentum, while a crossover below could signal bearish momentum. Stochastic Oscillators : Look for divergence between the price and the stochastic oscillators. If the price makes new highs/lows but the stochastic does not confirm (known as a divergence), it could indicate a weakening trend. ADX and DMI : If the ADX is rising and the +DI is above the -DI, the uptrend is strong; if the -DI is above the +DI, the downtrend is strong. If the ADX is falling, the trend is considered weak or the market may be ranging. For trade setups, you might consider the following: Long Entry : A new Renko brick in the direction of the trend, a bullish crossover in moving averages, the stochastic coming out of oversold territory, and a rising ADX with +DI above -DI. Short Entry : A new Renko brick opposite the trend direction, a bearish crossover in moving averages, the stochastic coming out of overbought territory, and a rising ADX with -DI above +DI. It's crucial to back test these indicators and their correlations with historical price data to validate their predictive power. Additionally, always manage risk appropriately, as indicators are not foolproof and should be used in conjunction with other forms of analysis and sound trading principles. Part 8: Working Through Some Examples to-follow
NYMEX:CL1!Education
by mxb1961
A Renko Trading Strategy - Part 6Part 6: How to Incorporate a Stop/Loss Strategy Incorporating stop-loss strategies into trading using Renko charts and options involves careful consideration of market dynamics, the specific characteristics of options trading, and the unique aspects of Renko charts. Here are some approaches tailored to this trading strategy: 1. Setting Stop Losses Based on Renko Chart Reversal Renko Brick Reversals : Since Renko charts are designed to filter out minor price movements, a reversal (change in brick color) can be a significant indicator. For options trading, consider setting a stop-loss order if there's a reversal that contradicts your position. For instance, if trading calls based on an uptrend indicated by Renko charts, a stop-loss could be triggered by the appearance of a certain number (e.g., two or three) of consecutive red bricks, signaling a potential downtrend. Percentage of Option Value : Determine a percentage loss of the option's value that you're willing to tolerate (e.g., 30-50% of the premium paid). This approach requires monitoring the option's value relative to market movements and Renko chart signals. 2. Volatility-Based Stop Losses Average True Range (ATR) Adjustments : Although traditional Renko charts do not incorporate time or volume, you can use an additional indicator like the Average True Range (ATR) of the underlying futures contract to set volatility-adjusted stop losses. This method involves setting a stop loss at a point where the option's underlying asset moves against your position by an amount that is significant based on recent volatility, indicating the trend might not be as strong as anticipated. 3. Time-Based Exits Option Time Decay : For options, time decay (theta) is an important consideration. You might set a time-based stop-loss strategy where positions are evaluated for potential exit if there hasn't been favorable movement within a certain timeframe, considering the decay's impact on your option's value, especially as it approaches expiration. 4. Technical and Fundamental Stop Losses Renko Chart Patterns : If your Renko charts show pattern breakouts or breakdowns (e.g., failure of a breakout pattern you traded on), use these as a basis for stop-loss orders. Fundamental News: For commodities like crude oil, fundamental news (e.g., geopolitical events, supply changes) can dramatically impact prices. If such events occur and are likely to adversely affect your position, consider them as triggers for your stop-loss strategy. 5. Dynamic Stop Losses Adjust According to Market Conditions: As market conditions change, regularly review and adjust your stop-loss levels. This dynamic approach ensures that your strategy remains aligned with the current market environment and Renko chart developments. 6. Mental Stop Losses Disciplined Execution : While physical stop-loss orders placed with a broker are automatic, mental stop losses rely on the trader's discipline to execute a trade when certain conditions are met. This approach allows for flexibility in response to market conditions but requires strict adherence to predetermined exit criteria to be effective. Conclusion Creating stop-loss strategies for options trading based on Renko charts involves a blend of technical analysis, understanding of options' characteristics, and disciplined risk management. By combining Renko chart reversals, volatility adjustments, time-based considerations, and both technical and fundamental factors, traders can develop a comprehensive stop-loss strategy that protects against undue losses while allowing room for the natural ebb and flow of the markets. Regular review and adjustment of these strategies in response to market changes are crucial for maintaining their effectiveness. Part 7: Some Examples of Analysis to-follow
NYMEX:CL1!Education
by mxb1961
A Renko Trading Strategy - Part 5Part 5: Devising a Strategy Based on Buying Calls/Puts When trading crude oil (CL) using options like puts or calls, the strategy involving Renko charts and pattern recognition can be finely tuned for option trading. The choice between puts and calls will depend on the identified trend and pattern signals across the three brick sizes. Here are scenarios that illustrate when to buy puts or calls based on the described strategy: Scenario 1: Buying Calls Signal : All three Renko charts (short-term, medium-term, long-term) show a clear uptrend with consecutive green bricks. The medium-term chart breaks out of a consolidation pattern upwards, and the short-term chart shows a reversal pattern from a minor pullback, indicating a continuation of the uptrend. Action : Buy calls as the uptrend signals an expectation of higher prices ahead. Example : If the long-term chart has been in a consistent uptrend, the medium-term chart shows a breakout, and the short-term chart indicates a reversal or continuation pattern, it suggests strong bullish momentum, making it an optimal time to buy calls. Scenario 2: Buying Puts Signal : All three charts indicate a downtrend with consecutive red bricks. A double top pattern appears on the short-term chart, suggesting a reversal from a minor rally within the downtrend. The medium-term chart starts trending downwards after a consolidation, aligning with the long-term downtrend. Action : Buy puts as the combined signals suggest a continuation of the downtrend. Example : After a brief rally indicated by a double top on the short-term chart, if both the medium and long-term charts reinforce a bearish outlook with consistent red bricks, it's an indication to buy puts, expecting the price to fall. Scenario 3: Buying Calls on a Reversal Signal : The long-term chart shows a downtrend, but the medium and short-term charts indicate a reversal pattern (e.g., an inverse head and shoulders or a double bottom). The medium-term chart starts showing green bricks, suggesting the beginning of an uptrend. Action : Buy calls to capitalize on the early stages of a potential reversal and uptrend. Example : Even if the long-term trend is down, a clear reversal pattern on the short and medium-term charts that aligns with an emerging uptrend suggests a shifting momentum, making it a strategic point to buy calls. Scenario 4: Buying Puts on a Failing Rally Signal : During an uptrend on the long-term chart, both the medium and short-term charts show a rally running out of steam, evidenced by a pattern of consolidation followed by a breakout to the downside on the medium-term chart, and a double top on the short-term chart. Action : Buy puts as the failing rally suggests a potential short-term downtrend, even within a larger uptrend. Example : If the long-term trend remains bullish but short-term indicators suggest a temporary reversal, buying puts can be a strategic move to profit from the expected downturn. General Approach for Options Trading with Renko Charts: Timing : Use short-term and medium-term charts for timing your entry into options trades. The short-term chart provides early signals, while the medium-term chart offers confirmation. Direction : The long-term chart sets the overall direction for the trade. Even in a bullish long-term trend, short-term downtrends provide opportunities to buy puts, and vice versa. Volatility : Consider the implied volatility of options before entering a trade. High volatility can increase option premiums, affecting the risk-reward ratio. Expiration : Choose expiration dates that give the trade enough time to work out. Longer expirations for calls in an uptrend or puts in a downtrend can be beneficial, allowing the market trend to fully develop. By aligning option buying strategies with Renko chart signals across different time frames, traders can enhance their ability to enter and exit trades with a higher probability of success, leveraging the clarity provided by Renko charts to navigate the volatility of the crude oil market. When buying puts or calls for Crude Oil (CL) futures with an approach akin to trading futures contracts but aiming to mitigate risk, particularly concerning options' time decay and other unique characteristics, a strategic approach is crucial. There are several key strategies to consider: 1. Choose the Right Expiration Time Horizon of Your Analysis: Align the expiration of the options with the time horizon of your market analysis. If your analysis based on Renko charts suggests a trend or reversal might play out over several weeks or months, consider options that expire at least 1-3 months beyond your anticipated trend reversal or continuation point. This buffer accommodates the time needed for the market to move in your favor while accounting for time decay. Avoid Short-Term Expiries: Short-term options are more susceptible to time decay (theta). While they may be cheaper and offer higher leverage, they also require the market to move quickly in your favor. Given the nature of Renko charts to filter out minor fluctuations and focus on more significant trends, a medium to longer-term option is generally more aligned with this strategy. 2. Consider Implied Volatility (IV) High IV: When IV is high, options premiums are more expensive, reflecting greater expected volatility. Buying options in high IV environments can be risky as you're paying a premium for the expected volatility. However, if your analysis strongly suggests a significant market move, this could still be profitable. Low IV: Buying options when IV is low can be advantageous because the premiums will be cheaper, reducing the cost of entry. If the market moves in your favor and volatility increases, the value of your option could rise both due to the directional move and the increase in IV. 3. Delta and In-The-Money (ITM) Options Delta : Consider the delta of the options. Delta close to 1 (for calls) or -1 (for puts) means the option price moves nearly in lockstep with the underlying asset, similar to owning the futures contract but with limited risk. Options with higher deltas are typically more expensive but less affected by time decay relative to their intrinsic value. ITM Options: Buying ITM options can be a strategic choice for mimicking futures trading. ITM options have intrinsic value and behave more like the underlying asset, with a higher delta and less sensitivity to time decay (theta) compared to out-of-the-money (OTM) options. 4. Rolling Options Strategy : To maintain a position in the market while managing time decay, consider rolling options. As the expiration date approaches and if your market outlook remains unchanged, you can sell the nearing expiration option and buy a further out expiration option. This strategy requires careful consideration of transaction costs and potential slippage but allows you to stay in the trade with a fresh time horizon. 5. Hedging and Risk Management Diversify Expirations : Instead of buying all options with the same expiration, consider staggering expirations. This diversification can help manage risk if the market moves against your position in the short term. Adjust Positions: Be prepared to adjust your position based on market movement and upcoming economic events. Use stop-loss orders or consider buying options with different strike prices to hedge your bets. Conclusion When treating options on Crude Oil futures like trading the futures themselves but with reduced risk, selecting the right expiration date is vital, taking into account your market outlook, time decay, and implied volatility. Medium to longer-term options with consideration for delta and ITM status can more closely mimic the behavior of trading futures while offering the risk mitigation benefits of options trading. Always incorporate risk management strategies and be prepared to adjust your positions as market conditions evolve. Part 6: How to Incorporate a Stop/Loss Strategy to-follow
NYMEX:CL1!Education
by mxb1961
2
A Renko Trading Strategy - Part 4Part 4: Incorporating Patterns with Strategy Incorporating pattern recognition into a trading strategy using three different brick sizes for Renko charts can enhance decision-making by providing multiple perspectives on market momentum and trend reversals. Applying this to the WTI (CL) market, using short-term, medium-term, and long-term views with different brick sizes. 1. Short-term Brick Size (e.g., 10 ticks, 1min) Entry Signal : Look for breakout patterns or reversal patterns like a double bottom or an inverse head and shoulders pattern. This brick size will be more sensitive to recent price movements, offering early entry points. Confirmation : Use this chart to get an early indication of a trend change or to catch the beginning of a new trend. However, due to its sensitivity, it's essential to wait for confirmation from the medium-term chart to reduce the risk of false signals. 2. Medium-term Brick Size (e.g., 25 ticks, 1min) Entry Signal : This chart size is great for confirming trends identified in the short-term chart. If the medium-term chart starts to show a series of green bricks after a reversal pattern in the short-term chart, it's a stronger signal that the trend is reversing. Strategy : Use this chart to solidify your decision for entry. For example, if you notice a consolidation pattern that breaks out in the same direction as the short-term trend, it can be a good entry point. The medium-term chart helps in filtering out the noise and focusing on more sustainable trends. 3. Long-term Brick Size (e.g., 50 ticks, 1min) Entry Signal : Long-term charts are excellent for identifying the overall market trend. A clear pattern of consecutive bricks (either uptrend or downtrend) can indicate a strong market direction. Strategy : Use the long-term chart for setting the direction of your trades. Enter trades that align with the long-term trend for higher probability outcomes. The long-term trend can also serve as a backdrop for assessing the strength of medium-term signals. Combining Signals for Entry Confluence Entry: The strongest entry signals will occur when patterns or trends align across all three brick sizes. For example, if the short-term chart shows a reversal pattern, the medium-term chart begins to trend in that direction, and the long-term chart supports this with a consistent trend, it's a strong signal for entry. Breakout Entry: A breakout from a consolidation pattern (rectangle) on the medium-term chart that is also supported by a long-term trend can be a robust entry signal. The short-term chart can be used to fine-tune the entry point, such as entering after a small pullback following the breakout. Risk Management Stop-Loss Orders : Place stop-loss orders based on patterns from the medium or long-term charts to give your trades more room to breathe while still protecting against significant losses. Take-Profit Points: Set take-profit levels based on significant resistance or support levels identified in the long-term chart to capitalize on the overall market movement. Example Scenario Scenario : The long-term chart shows a steady uptrend with consecutive green bricks. The medium-term chart shows a breakout from a consolidation pattern, and the short-term chart shows a double bottom, indicating a potential reversal from a recent minor pullback. Action : Enter a long position after the double bottom on the short-term chart, with the medium-term breakout providing additional confirmation. The long-term uptrend supports the overall bullish outlook. Risk Management : Place a stop-loss below the most recent low on the medium-term chart and set a take-profit near a significant resistance level identified on the long-term chart. Conclusion By using Renko charts with three different brick sizes and recognizing patterns across these timeframes, traders can develop a nuanced and layered approach to entering the crude oil market. This strategy allows for early detection of trends, confirmation across multiple timescales, and robust risk management, leading to potentially more informed and strategic trading decisions. Part 5: Devising a Strategy Based on Buying Calls/Puts to-follow
NYMEX:CL1!Education
by mxb1961
WTI OIL Is this a rejection?Almost 3 weeks ago (February 07, see chart below), we gave a strong buy signal on WTI Oil (USOIL), right at the bottom (Higher Lows trend-line) of the 2-month Channel Up: The price is approaching the 81.50 target right at the top (Higher Highs trend-line) of the Channel Up. Since however we see a strong Resistance Zone that has been holding since the previous Higher High of the pattern, there is a very high probability for a pull-back, until it breaks. In fact, this Resistance Zone goes back to the November 14 2023 High (Resistance 1), with numerous rejections since. As a result, we will only buy again after a 1D candle closes above the Resistance Zone, in which case we will pursue the 81.50 Target. Until then, we regard the recent rejection as a sell signal and we target the 1D MA50 (blue trend-line) and bottom of the Channel Up at 75.00. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:USOIL
by TradingShot