Money management wise,I am done for the month. - And should not risk any more trades
I will try to sit still & watch the current move up expire anywhere between $32 & $36. The 4hr & day (Rsi-4) are both O.B and their divergence with price should dictate a sell entry to $25 target. This is my planned trade for June. I may also be tempted however to buy $27.25 - $28.00 to target $32.25 - $33, on a pull back in the current move. That's another $5 / barrel. And the ending diagonal still has room to run.
The money rule I am following here is to keep risk at 10-15% on an $10000 account, (hedge after this risk to gradually clear out a losing trade) and take profit at $5000 / trade = $ 5/ barrel move / standard contract on an $10000 account. Take only one trade / month = $5000 profit / month = $ 60000 annual profit = R.O.I 600% / annual.
I aim to stay focused on the econometrics / money target in taking a price swing rather than the actual overall market direction.
Stay indoors & safe
bruno10000
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@Summerset, Thank you very much! Really appreciated.
And very inspiring
I read many technical analysis for WTI, and very very few were able to spot the right one.
Sincere congratulations!
It looks like it is heading towards inverse head and shoulders pattern
My trading plan (if neckline validated)
- Sell 30,2 SL 31 ==> 26,8 TP
- Buy 27,25 Neckline TP
- If break out of the Neckline ==> calls December
TP 41 17%
TP 44 17%
TP 48,5 17%
TP 54 50%
If I may ask, do you think it's too bold?
Moreover is there any other website/Discord/twitter/Telegram where you are posting your trading plans?
I don't think the neckline will be violated any time soon.
This is because of the following fundamental assessment, made in points (a) to (d) explaining exactly why the Corona pandemic as a fundamental driver is different from all past bear fundamental drivers that affected the oil market since 1950 ;- (We are currently in a bear market for Oil, for the next 10 years)
a- From 1950-2020, there has been two bull markets in oil. The 1st broke out during the Yom Kippur war – (a geopolitical event). And the 2nd was due to the Internet / IT technology boom on the NYSE & world equity markets. (started late 1999 – early 2000 and continued till 2008).
b- Before the Internet equity markets’ rise, oil prices had never broken below the $20-$30 support zone. Note that it took a series of wars in the gulf (1990-2003) to keep oil prices above that strategic support level – regardless of a multitude of economic slow downs, and at least one major recession during that period.
c- The Corona pandemic, is the only fundamental driver to have caused prices to fall way bellow the ($35-$20) strategic support ($2.64 on spot CFDs & -$37.68 on futures). Technically - All bounces back up will be contained under this support zone. ($35-$20), & $ 35 at the very most. Take note that the current bounce correction -A in price is leveling off at $33.
d- Contrary to the general presumption in Oil recovery, the problem affecting oil does not only have to do with smooth speeding of economic unlock measures. A bearish secular market has already broken out in oil, and could statistically last for years, unless there is a geopolitical event (war in the gulf to take out 30 mil br of Oil production off the market). This will then break the strategic support at $35-$20, and probably take oil to spike above $80.
Until there is such a geopolitical event, I believe the market with run a lengthy 5 major wave bearish wedge down (Wave-5 down) in alternation to the falling wedge shown on the chart above. And also in alternation of the ending diagonal shown on the chart- corrective wave-A. Until there is a war this bearish wedge will prolong & can last for the coming decade, and will see $10 & below in its leg 3 "C" & even $3-$2.75 in its leg 5 "E"
This is why I believe that as an investment, one needs to be parked in Oil CFD longs for a sustained period of time.
I have complied a detailed report on this, that I have been trying to upload on trading view / educational, but don't seem to be able to find the right uploading tools. However, i could mail you a copy if you wish.
At the Moment I think leg A (ending diagonal) shown above is finished, and I am observing market to short near $33 to target $28 in the 1st leg of "B" down. As newer pandemic problems develop "B" should gradually re-test the lows made.
All the Best & stay safe.
bruno10000
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@Summerset, Thank you very much again for your explanations
and probably you save me some K€!
Yes I'd be very interestied in reading your report. a n n u a i r e @ w m o . f r without the blanks.
Thanks!
Take care
So what's the next step?
Thanks