WTI @ 69.33 headed for $70s - $80s end of August

18 minutes ago, BillKidd said:

Can traders make any money on 1 cent moves in oil? Say, it moves from 69.33 to 69.53, any profit there? That is a 20 cent move.

Moving from 69.33 to 71.00, that seems a big move, I would think a lot of money could be had there but I don't know anything about trading, just curious.

of course you can... more than one way of doing it, but a common method is via CFD trading or "contract for difference" youll have to google it but essentially you can obtain great leverage from the the CFD instruments - as much as 300:1 leverage (maybe more im not sure exactly what the full range of instruments available out there are). So trading large lot sizes and with high leverage means you can make or loose lots of money on very small price movements. High leverage also means high risk so make sure you do your homework or youll end up as JJ says...

As to the WTI price today - looks like it retraced back to where it started and didnt follow up like it did yeterday... still curious to see which way the big end of town pushes the market come 9am NY time...

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(edited)

2 hours ago, Top Oil Trader said:

Bill, you are not alone, hardly anyone knows anything about trading, Billions lost every year, look at traders who have been around for a long time, and shorted TSLA, now TSLA may actually go up again, even though they had a loss of 700 mill, many been wiped out, and still as we speak are being wiped out. Smartest traders in the world shorted the dot com bubble and got wiped out. Smartest traders where long gold at 1800 and got wiped out, saying you don't know anything about trading, is more or less what even the best of the best prove by their trades. During 29 crash, smartest traders where long, what I mean by smartest, they where looked at as being the smartest, but the markets have ways of putting people back in their place. The reason lots of Billion $ hedge funds have lost on TSLA and will continue to do so is simple. Remember 80% of most hedgefunds are what? fundamentals. So if we look at the corp earnings of TSLA, the trained harvard analyst, would say its a screaming short. Well this would be the case if you asked any smart accountant or analyst. However, in stocks there are more things in play besides the books, people who recognize this can make fortunes going long, same thing happened with cryptos, which at one point where $35 and went to $20,000. And when they where 20,000 at that time a big hedgefund player predicted 70,000 and they went to 6000. So this is where confusion comes in, in many cases like in Buffets case, he predicts correctly what stocks to buy, like coke, geico, goldman etc, but he is a safe investor, not a get rich quick investor, there is a big difference. I always tell people even if you get 2 phds in mathematics from harvard, the stock market will always be smarter than you, look what happened to long term capital,  they lost 4.6 billion in less than 4 months, a fund run by the smartest investors back then.

I did a Google search on high speed trading algorithms.  Then I made an appointment to have myself digitized to optimal microwave transmission speed.  LOL.  Maybe one of you can provide a link to a current video showing algos in action.  It seems that the videos available for a general search are not very current.  What IS available from Oxford and others shows enough about what was happening with algos in 2012 to be shocking.  I can not imagine where they are today.

To your point, JJ, about going to have a look at headlines so see what the algos might use as a trigger: I get it now.  Algos have been programmed, or trained, if you will, to 1) find, read and interpret headlines, 2) initiate a trade in waiting before any other algos can act, and 3) cash out of the trade at a profit.  All BEFORE a human being can finish reading the same headline.  Oh, brother....

Edited by Dan Warnick
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It seems sell sell sell is the order of this morning on Oil. Where is my $80 oil? 🙂

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(edited)

1 hour ago, Dan Warnick said:

I did a Google search on high speed trading algorithms.  Then I made an appointment to have myself digitized to optimal microwave transmission speed.  LOL.  Maybe one of you can provide a link to a current video showing algos in action.  It seems that the videos available for a general search are not very current.  What IS available from Oxford and others shows enough about what was happening with algos in 2012 to be shocking.  I can not imagine where they are today.

To your point, JJ, about going to have a look at headlines so see what the algos might use as a trigger: I get it now.  Algos have been programmed, or trained, if you will, to 1) find, read and interpret headlines, 2) initiate a trade in waiting before any other algos can act, and 3) cash out of the trade at a profit.  All BEFORE a human being can finish reading the same headline.  Oh, brother....

Algos can be written to do whatever the programmer wants it do, the limit is only the imagination of the programmer. My father wrote some of the very first Algos ever used in trading more than 25 years ago. They were looking at all sorts of things in terms of patterns etc and running simulations on all the previous data they could obtain from the ASX. Theyd make changes and run it again and again etc... this went on for 3 years whilst my father was working on it until they had something workable - ie, it won significantly more than it lost - and this was 25 years ago!. They muscled him (my father) out with some clever barristers once they didnt need him anymore and went on to become some of the richest men in australia... karma got the older one, leaving just 1 stooge with it all...  i cant imagine how far things have gotten with the programs today. Irrespective of that, i dont really see the problem with it provided you understand that they are out there... with so many different strategies and algos operating, the market still ends up quite random...

back to the oil price - its down approx 1.8% now, 67.90. Im sure the saudis wont let it go too far before they step in to prop it up again... seems the big players have it comfortably in range between $67-70...

 

Edited by catch22
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2 minutes ago, catch22 said:

Algos can be written to do whatever the programmer wants it do, the limit is only the imagination of the programmer. My father wrote some of the very first Algos ever used in trading more than 25 years ago. They were looking at all sorts of things in terms of patterns etc and running simulations on all the previous data they could obtain from the ASX. Theyd make changes and run it again and again etc... this went on for 3 years whilst my father was working on it until they had something workable - ie, it won significantly more than it lost - and this was 25 years ago!. They muscled him (my father) out with some clever barristers once they didnt need him anymore and went on to become some of the richest men in australia... karma got the older one, leaving just 1 stooge with it all...  i cant imagine how far things have gotten with the programs today. Irrespective of that, i dont really see the problem with it provided you understand that they are out there... with so many different strategies and algos operating, the market still ends up quite random...

 

What about algos for longer term trades?  I mean, if I'm in stock options with expiries 6 months out and I become happy with my returns after any amount of time within the 6 month term, let's say 2.35 months from open, are there algos that can still sniff me out :) and screw me while I'm making an exit/close?

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Algos are not there to stiff you - they are written to make profits for the trader running it. If you happen to get caught out by a trade bouncing violently due to big money being passed - thats just you being caught in the crossfire , not you specifically being ripped off. Thats the  problem with automated trading, stops or buys being triggered by extremely large positions. Theyre positions are so large that their activity affects the market prices significantly and causes big movements. These movements are difficult for small traders to absorb because the volatility they generate makes it difficult to set modest stop losses and suchlike without them being triggered by these big players and their activity. Its like when your sitting in your little boat fishing and a huge whiteboat comes flying past generating an enormous wake behind them, capsizing all the little boats as they go past... they dont mean to do it so much as they simply cant help it... the challenge is to work around them and youll still catch a few fish - or you can surf their wake too, just have to figure out a way that works for you and what your trading.

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(edited)

Sorry looking at the futures not the cash price.

oil taking a nose dive under 67.26 right now. This should be the drop before they bring it up above 70. However, it has now dropped quite a lot. My prediction that it would cross 70 was wrong, miss timed. I will admit that I am not trading oil now, and I am not fully looking at every little dot on the chart, most of the time I am analyzing the euro, But I do think 70 will break and continue to 71, if I can say at least this month.

Edited by Top Oil Trader

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(edited)

But notice it tried to go, and it was where knocked down with all the force, someone doesn't want the prices to go up. But this is only temporary, since you can't permanently knock out an instrument out of its trend by shorting the futures. However the damage is still done to all the bulls. From what I see there is nothing more volatile than oil.

Edited by Top Oil Trader

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this happened again today when oil hit above 70, not sure how big those order where, but they should have been massive. See if you can search on Citadel, those guys are the biggest. 

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That is a vicious sell off the drop off is nearly vertical and its still going.

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The volume was actually quite low when the sell off began and so far on the day it doesn't look anything above average either there was just no resistance, sliced through every support like it wasn't there.

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Based on today's action having watch different instruments, I would say the most volatile instruments are the oil futures, then index futures, dow, sp, nasdaq and then forex (well the majors) and then stocks. Now so how do you outsmart the algos? I am happy you asked. The news won't help, and neither will being a trader involved with the daily up and downs, and neither will the regular chart knowledge, and neither will prayer. The sophistication needed is something that would take light years to master, with an average brain. I mean I keep giving you examples of the smartest traders with iqs of 500, that end up bust, and they know everything, news, algos, charting etc.

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OR you apply a simple chart patter of "triple top" put your stop loss just above 70 with Target N1 : 68.01 and N2 67.18. Both reached go home with profit.

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Shorts can go out to eat tonight, maybe have a steak or a nice lobster.  Of course, the day's not over.  How low will she go?

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JJ said it wont go below 66 no matter what, so lets see 🙂

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I still think we go to 70, sometime soon.

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(edited)

23 minutes ago, Top Oil Trader said:

I still think we go to 70, sometime soon.

80 in August was your prediction? It might still be entirely possible.

I was long until today, took one look at the charts, admitted I was wrong, swapped and got rewarded. There is no shame in changing ones position and admitting its not going your way.

It's comical how this morning all Oil headlines were about $90 oil and how its going up due to Iran sanctions etc. All is miraculously forgotten now and Oil prices slide amongst China tariffs, doom to all we are heading for $40 

Edited by drdanger

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for sure. On oil i'm looking at the trend, and im not trading oil as a daytrader, and indeed it does range 150 points to 250 points a day, like i mentioned many times.

After the drop I looked at a smaller time frames, and actually it was a screaming short. But since 99% of people here are not traders but fundamentalists, Im trying to show what will happen eventually, with some volatility. If we look at today the news was actually good for oil, but it nevertheless dropped 200+, that could only have been someone trying to protect their call options, an Algol outfit, or big players just bullying the futures market. If the oil prices will hit 80, the fundamentalist won't care about some fluctuation. Having said that, I should have looked at the chart for more than 10 seconds,, and looked at the other time frames, before I said it would go above 70 today. Just please remember I don't trade oil futures now.  But I still think we should hit 70s either this week or next. And 80 still possible this month.

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market indicators were neutral from EIA petroleum inventories. Oil certainly is volatile thats for sure... i watched it slide past 1% decline with the candlesticks outside the lower bolliger band, RSI still not oversold, and MACD still diverging so had my finger on the sell button... but then i thought im too late to go in short so didnt act... it kept going well past 2.2% down... missed a great opportunity on that one. The market didnt care about the news? or did it? The sellers and producers are perhaps taking the best price they can now over fears it will soon climb higher over $70 by precisely what is in the news and Iran etc in the not too distant future... Any Iran impact has to be at least 3 months away however, so the near term direction is anyones guess at this point...

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Price did go down, but  80 still possible in August.

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3 hours ago, Top Oil Trader said:

Price did go down, but  80 still possible in August.

im not missing this the second time round... im short at 66.80 and its falling nicely :)

lets see how deep the rabbit hole goes...

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I don't believe anyone wants below 66, however everything is possible. I'm with JJ on this one, the supply concerns have not gone away, the news is actually positive for oil prices, some big money did not want it to go above 70. 

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in the space of about an hour - it bounced up and hit my stop at my buy price again... what a ride! It just just missed my close at profit at 66.50... thats trading a volatile commodity for ya!

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Oil is trying very hard to go up, but something is not letting it, but it should break through.

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wow yes sorry to hear that. you can tell there are people out there looking to hunt your stops

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