Hear ye, hear ye oil traders!

FX:USOIL   CFDs on Crude Oil (WTI)
788 30 7
Well as I'm getting to go to sleep I happen to check out crude price action on my phone and notice something very interesting. It seems as we have a potential descending triangle pattern developing in crude. New traders may be wondering what this may mean (if your a more novice trader you shouldn't be trading any commodities IMO             lol but if you are well idk what to say). Anyhow, I attached a link on this post with a chart that has an explanation of what a descending triangle is, and what it means in regards to price action. Another technical perspective to keep in mind is the multiple price rejections at the 50% Fibonacci resistance level . So all in all, I'm not personally trading my view on crude oil             through the futures but through shorting leveraged oil             companies. That being said, I always keep my eye on what the crude futures are doing before the US open, and any interesting price action that may be forming indicating bearish bias on crude which as you may know benefits my short positions on lev. oil             companies.

What I would be looking for if I was trading crude would be for a break and close below the support level drawn out on the chart (roughly the $44.0 area). BTW             I would be on the 1HR chart when looking for entry on a retracement back to the broken support turned new resistance. For those finding it difficult to find short entries in crude oil             , the 1hr chart works fabulous for finding entries on crude oil             . And if there is wide enough price ranges move up to the 4hr chart. This little piece of advice is geared towards swing traders not those looking to day trade crude.

Cheers, and hope you like the chart. =)
totally new to this but i think its fun. can i get some feedback on this?
Daniel.B jarrod.baker
Hey how's it going Jarrod, you need to ask a more specific question so somebody can help you.
hmm... when you look at my chart, can you see my logic behind my analysis? Or are my lines drawn arbitrarily? Is your first thought when you look at this, "this guy is a damn fool, no idea what he's doing."
smitheric1970 jarrod.baker
hahaha I call myself a damn fool whenever I make the wrong trade! Personally I think you are showing a similar descending triangle as Daniel but with an expected break to the upside. I would ask why you expect the upside target? Not arguing with it at all, just curious, Lighthouse has a bullish pennant view, although, if we do head back uphill there seemed to be a lot of distribution happening at the 49 area. This 35'ish to 49 range goes back years. I'd like to see another retrace up to 47-49 for another great shorting opportunity but personally don't think it will go any higher than 49.5. Right now it looks like prices are breaking down but I've added in a short term possibility chart of a fake below the triangle and back into the distribution range.
+1 Reply
jarrod.baker smitheric1970
I saw your defending triangle in May, more as a channel. Then from "the next support rising triangle. when that broke down, I took the initial pivot, and then the support from after the break down to draw a a bottom line. took the last high, right before the ascending triangle break down, and then the next little pullback to draw a top line. Extended them both and used their intersection as S/R. Also with the volume inside the current descending triangle, the volume is spiking at the top, indicates bears trying to bring it down. overall the volume is decreasing through the triangle, showing the bears are giving up, leaving room for the bulls to break above the resistance from the bears. I don't have volume on mine, but looking at yours.
smitheric1970 jarrod.baker
Nicely done!
+1 Reply
jarrod.baker jarrod.baker
wow, so many spelling/grammar errors: *descending, *"the next support"
jarrod.baker jarrod.baker
No fundamental reasons.
Daniel.B jarrod.baker
Nice discussion you guys got going on in here! haha To answer your question Jarrod I can see the reasoning behind your trend lines and triangle. But just in my experience in trading oil, when we get distribution (ie. forming triangles, etc) oil tends to break to the downside, and if it breaks to the upside of the triangle it only forms a horizontal channel for 1-3 weeks only to break lower on the channel, so me personally if the triangle breaks to the upside I would rather see a break and close above 48.00 (roughly the highs of this triangle), and even then I just don't go long oil I just wait for a deep retracement to look for short positions. And good analysis by the way, remember analysis doesn't have to be "correcct" in predicting where prices may go to be "good analysis" so if you are really new to this, don't get beat down when your analysis is incorrect. Because nobody gets it right 100% of the time, its just a business of probabilities and doing your best to get the odds in your favor, and mitigating your losses when you do have any. =) Once again, good analysis and reasoning behind it. =)
+1 Reply
Thanks! I don't actually trade oil, honestly I don't fully understand how futures work. But I just like to use this for small cap Oil stocks ($PES), and ETFs ($UWTI) both did really well today :)
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