MCX Crude oil trading strategy
This video explains a crude oil intraday strategy using camerilla pivot points. Pivot points are commonly used indicator in intraday trading. Some use traditional, fibonacci or camerilla pivots. This strategy used weekly camerilla pivot points and 15 minute pivot levels. Its a high probability strategy with good risk reward if you use it properly. Weekly pivots acts as strong levels of support or resistance in chart. Its clearly shown in video. Strategy is developed based on that concept mixed with a 15 minute pivots. If you want we can discuss more crude oil strategies in coming videos.
Another Simple Yet Effective Crude Oil Trading Strategy for Indian Traders
Crude oil is one of the most actively traded commodities in Indian markets. With high volatility and profit potential, it attracts hordes of active traders every day. However, consistently making money in crude oil futures requires following an edge-providing trading strategy. If executed properly, such a strategy can help you book regular profits irrespective of market conditions. This article talks about one such simple yet effective crude oil trading strategy that Indian traders can use.
Using Volume Weighted Average Price (VWAP)
The strategy is based on a key concept - Volume Weighted Average Price (VWAP). VWAP is a commonly used indicator by intraday traders. As the name suggests, it provides the average price of a commodity weighting higher volumes more. So in crude oil, if a particular price level sees huge trading volume, VWAP gives more weightage to it.
VWAP acts as a reference to identify value zone on crude oil charts. When price reaches VWAP levels, it usually results in a small pullback or bounce. We are going to use this tendency of price respecting VWAP to identify low risk trading opportunities.
Entry Rules
Buying Rules Our first trading rule will be to buy when the crude oil price takes support and bounces back from VWAP levels. This bounce back itself indicates the bullishness is likely to continue. We will enter long when the prior candle forming near VWAP closes above the high of last three candles.
Selling Rules
On the sell side, we will look for VWAP acting as a resistance. If the crude oil price struggles to move above VWAP and starts reversing lower, it shows bears are active. Our short entry rule will be to go short when price closes below prior three candles after hitting VWAP resistance.
Strict Stop Loss Rules
Proper risk management is key to survive and thrive as a trader. So we will use strict stop loss rules along with the defined entry guidelines.
Our stop loss on long trades will be kept just below the low of the reversal candle that triggered our buy entry. And on the short side, we will place the stop loss above the high of the candle closing below VWAP resistance.
Following these stop loss rules ensures our risk on every trade stays contained. When you focus on risk first, managing profits becomes easier. As the saying goes - cut your losses short and let your profits run.
This straightforward approach of using VWAP's tendency to act as value area gives us a high probability crude oil trading strategy. Follow the defined entry rules and stop loss guidelines, practice proper risk management, and it can profitably work in all types of Indian crude oil market scenarios.
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