WTI Crude Oil Trading Plan-September 1, 2017
Shain Vernier • 2 min read
Today’s October WTI crude oil futures contract is trading within yesterday’s range on heavy volumes. Watching the crude trade on Fridays is always interesting during the U.S. session. Profit taking and positioning for the weekend typically brings institutional money to the table.
Participation creates opportunity. With a bit of luck, this market will come our way and we will capitalize.
It is not every day that a market call hits the daily high or low within one tick. It happened during the Thursday session, as a key resistance level held and we effectively sold the high.
WTI Crude Oil Futures-Thursday’s Chart
Today is a different scenario. WTI crude seems poised to fill in the value area of yesterday’s range. As I write this, we are seeing a selloff under $47.00 and a test of the intraday low at $46.63.
This yields two high probability trade setups for the rest of the U.S. session:
A breakout above yesterday’s high. Buy at $47.48
Rotation from yesterday’s low. Buy near $45.58
Our breakout scenario is still in Thursday’s resistance zone of $47.46-$47.60. We will know immediately if it is a winner or if the resistance is just too much to overcome. As a rule, I like areas where the trading is going to be hot. The second test of this area should yield a bullish run towards $48.00.
The rotational scenario gives us a chance to play off of Thursday’s low. If price nears this level, our daily range will be approaching over extension. A buy entry of $45.75 gives a solid 1:1 ratio. Scalping for 10 ticks at $45.65 is also an option. Either way, the concrete stop is under Thursday's low, at $45.57.
Both trades are positive setups. Select the trade management that best works for your account and rack a few ticks!