Best technical approach to trading calendar spreads in Oil

[ULJUH]

Hi my friend, no I'm not trading them anymore I'm doing some FX online.

How do you find the brent spreads? They were good, I think it was just me who wasn't patient! I think you need some decent volume though, say a 2 or 3 lot and look to make 3 or so on the single spreads and on a 3 or 6 months spread go for 10 ticks (I stayed away from 6 month though)

what type of strategy do you use? what else have you traded?

Hi Ram088.
I work for a prop trading firm, my lot size is 20 lots but i rarely hit that much. Usually I trade with a clip size of 4 lots. I am a price action trader and mostly trade on that basis. My mentor told me that it takes atleast a year to learn brent market and I am still learning. Apart from brent I trade WTI spreads, June dec spreads of brent and wti. I googled brent spreads and found this forum. Very little info is available about the brent spreads though a lot can be found about brent outrite. What currencies are you trading?

 

[6th-high]

Hi Ram088.
I work for a prop trading firm, my lot size is 20 lots but i rarely hit that much. Usually I trade with a clip size of 4 lots. I am a price action trader and mostly trade on that basis. My mentor told me that it takes atleast a year to learn brent market and I am still learning. Apart from brent I trade WTI spreads, June dec spreads of brent and wti. I googled brent spreads and found this forum. Very little info is available about the brent spreads though a lot can be found about brent outrite. What currencies are you trading?

Ok yes the brent spreads , in my experience, tend to have a correlation with the front month outright. I have found this is true for the first 3 month single spreads or so and the 3 and 6 month spreads e.g. april may spread and may june would probably follow the same direction as the outright. the back end of the single spreads so something far out like oct-nov would have less of a correlation. 3 month and 6 month it depends , they were just fun to trade : ) (and risky might I add especially 6 mth)

what is it you want to learn? there is a pdf on CME website about how brent took over WTI as the benchmark for oil, i read that, was an ok read. check it out

So for example , what signals do you use for entry exit and what overall picture do you look at? When I say picture I mean do you use a daily time frame for over all direction then use say 30 min chart for entry or do you just look at day movements and use say 5 or 15 min charts? What indicators do you use?

For FX I am using Fib (I used to use things like stoch and rsi with trend lines and moving average but im finding that fib is better) I trade 5 or so pairs mainly GBPUSD, EURUSD, AUSUSD, USDJPY and then either EURCHF or USDCHF. don't ask me why but I find AUSUSD treats me well.

I have some friends who were more seasoned traders then me, they are saying trading is a dying industry unless you go into algorithmic trading or high freq trading, would you agree?

 

[ULJUH]

Ok yes the brent spreads , in my experience, tend to have a correlation with the front month outright. I have found this is true for the first 3 month single spreads or so and the 3 and 6 month spreads e.g. april may spread and may june would probably follow the same direction as the outright. the back end of the single spreads so something far out like oct-nov would have less of a correlation. 3 month and 6 month it depends , they were just fun to trade : ) (and risky might I add especially 6 mth)

what is it you want to learn? there is a pdf on CME website about how brent took over WTI as the benchmark for oil, i read that, was an ok read. check it out

So for example , what signals do you use for entry exit and what overall picture do you look at? When I say picture I mean do you use a daily time frame for over all direction then use say 30 min chart for entry or do you just look at day movements and use say 5 or 15 min charts? What indicators do you use?

For FX I am using Fib (I used to use things like stoch and rsi with trend lines and moving average but im finding that fib is better) I trade 5 or so pairs mainly GBPUSD, EURUSD, AUSUSD, USDJPY and then either EURCHF or USDCHF. don't ask me why but I find AUSUSD treats me well.

I have some friends who were more seasoned traders then me, they are saying trading is a dying industry unless you go into algorithmic trading or high freq trading, would you agree?

I usually see 15 min, 60 min and 240 min chart to base my trades. I dont see any indicators but just use them to not get caught on wrong side.Most of my trades are based on reading the tape and taking positions accordingly .
Yes algorithmic trading is getting more common. Our firm also started doin algo trading recently. But if u ask my personal opinion, I dont think trading is a dying industry. Just because you cannot use some formula and expect it to work all the time. Humans can change their strategy instantaneously but it is not possible with algos. Ofcourse you can tweak them but then again the algos are as good as the trader himself who is behind it. Moreover some algos can be spotted in the price ladder placing orders of specific lot size and if you are able to spot them, it might be possible to take advantage of them. Also there are algos which try to track other algos and they fight among them. With the increase in computing power trading might go more algorithmic but I still believe that there will always be oppurtunities in the market.

 

[6th-high]

I usually see 15 min, 60 min and 240 min chart to base my trades. I dont see any indicators but just use them to not get caught on wrong side.Most of my trades are based on reading the tape and taking positions accordingly .
Yes algorithmic trading is getting more common. Our firm also started doin algo trading recently. But if u ask my personal opinion, I dont think trading is a dying industry. Just because you cannot use some formula and expect it to work all the time. Humans can change their strategy instantaneously but it is not possible with algos. Ofcourse you can tweak them but then again the algos are as good as the trader himself who is behind it. Moreover some algos can be spotted in the price ladder placing orders of specific lot size and if you are able to spot them, it might be possible to take advantage of them. Also there are algos which try to track other algos and they fight among them. With the increase in computing power trading might go more algorithmic but I still believe that there will always be oppurtunities in the market.

exactly spot on; algo are only as good as the trader behind them! so its not about seeing it has a dying industry because of algos, its about learning algos to see why and how traders use them , good one my friend.

Reading the tape: you get this from Reminiscence of a stock operator? : ) entertain me, when you say 'reading the tape' what are you looking for? When i started learning to trade I used Market profile, i like it a lot, but for FX because im just trading at home i dont have it on my online platform hence using fib, indicators and support/resis and trend lines .

which indicators do you use to not get caught on the wrong side? MACD I heard and keep hearing is v good but i never seem to find it works

 

[ULJUH]

exactly spot on; algo are only as good as the trader behind them! so its not about seeing it has a dying industry because of algos, its about learning algos to see why and how traders use them , good one my friend.

Reading the tape: you get this from Reminiscence of a stock operator? : ) entertain me, when you say 'reading the tape' what are you looking for? When i started learning to trade I used Market profile, i like it a lot, but for FX because im just trading at home i dont have it on my online platform hence using fib, indicators and support/resis and trend lines .

which indicators do you use to not get caught on the wrong side? MACD I heard and keep hearing is v good but i never seem to find it works

I use MACD, bollinger band and moving averages. But I dont use them to base my trades. How I use MAcd is say if 240 min macd is crossed over on the downside then I will try to take more shorts than longs. I will try to find the resistances ( fib levels, moving avgs etc) and will be shorting around that area but then again if i dont see selling coming in on the tape, i wont short. Price action needs to confirm on the tape, for the same.

 

[6th-high]

I use MACD, bollinger band and moving averages. But I dont use them to base my trades. How I use MAcd is say if 240 min macd is crossed over on the downside then I will try to take more shorts than longs. I will try to find the resistances ( fib levels, moving avgs etc) and will be shorting around that area but then again if i dont see selling coming in on the tape, i wont short. Price action needs to confirm on the tape, for the same. This is how my screen looks like.

You might be abe able to spot brent dec-jan spread which is at 1.20 ( this image is frm december)

Ahh ok so MACD for the overall 'picture' or trend if you like , right? so if MACD has crossed over the downside, you look for shorts based on you shorter time frame analysis. p.s. I cant open the picture can you try again, v interested to see it! in oil for spread i used Market profile on 30 min chart looked for low volume single TPO lines and went with the general trend has seen by a daily time frame which i used bar chart, bollinger band, stoch and rsi. I cant send a pic but if i get some good trades on FX next week with fib (using 15 or 30 min chart) i'll send it to you.

 

[ULJUH]

Ahh ok so MACD for the overall 'picture' or trend if you like , right? so if MACD has crossed over the downside, you look for shorts based on you shorter time frame analysis. p.s. I cant open the picture can you try again, v interested to see it! in oil for spread i used Market profile on 30 min chart looked for low volume single TPO lines and went with the general trend has seen by a daily time frame which i used bar chart, bollinger band, stoch and rsi. I cant send a pic but if i get some good trades on FX next week with fib (using 15 or 30 min chart) i'll send it to you.

hey send me ur email id, i have some prob in uploadin