Oil ETF Trade of the Week

Posted in: Options Trading, Spotlight Power Trader, Stock Trading, Swing Trading, Trade Of The Week, Trading Article

Crude Oil has long been one of our favorite markets to trade.  For day trading, we prefer Crude Oil Futures –  CL.  On most weeks, we post excerpts from our live trade room showcasing our weekly crude oil inventory report trading.

It tends to win most of the time.

Crude oil is a commodity that can go on excellent mid to longer term trends and to take advantage of that, swing trading an oil ETF is a great choice.

Our choice is USO (US Oil ETF).

Why?

It trades in millions of shares per day making it a great choice for options trading.

 

Spotlight Power Trader – Short Trade In USO

Spotlight has indicated a short trade (March 6, 2018) and we have a chance to get in sync with it.

Here are the details:

  1. If USO gets to 12.09, buy May 13 puts
  2. Conservative traders can go with June 13 puts for more time
  3. Set your stop at 13.21; if USO hits 13.21, close out of your options position
  4. Scale out at 11.39, 10.94 and 10.50.  We will trail the remaining part of the trade.
  5. If the price hits 11.48, we will move our stop to break even and begin trailing.

** For updates to this trade as it progresses, Click Here.

Trading Plan Statistics:

  • This trading plan has a 3.66 profit factor; short trades’ PF (profit factor) is 5.49!
  • It has only lost two consecutive trades two times in the last 10 years
  • See the 10 yr equity curve, based on 5 positions, one share each; 4 Ts and a trailer
  • The trade got short a couple weeks ago and as it is still developing, we have a chance to ‘get in sync’ with it if the price moves lower.
  • The price action has shown us a possible near term support area so we want to see the price move below that level. The original entry was 12.17, but now that we have the benefit of some hindsight, I’m adjusting the entry to 12.09.
EQUITY CURVE
EQUITY CURVE

You can see that trading success is not a direct line.  The key is that after the random distribution of wins and losses keeps playing out, over time you continue to make new equity highs.

It is crucial that you use a trading system like our Spotlight Power Trader alongside a proven trading plan so that even when the equity curve dips down, you still have the confidence to continue trading.

Take some time to watch the trading video below where I will show you the exact charts this trade has set up on.  I hope you notice the simplicity of our trading system and how your only job is to follow the plan and manage risk.


Here’s an update on our previous trade of the week:

Long the USDCAD on 2/18/18

  • We move stop to 1.2669

This trade is moving nicely in our direction.  A couple days ago it hit our first objective, which is our money management level.

The stop should be moved to 1.2669, which completely eliminates the risk and locks in 30 pips of profit.

We will keep an eye on our trailing indicator and begin trailing as the trade progresses when appropriate.  This plan of action is contained in the trading plan for this trade.

You are able to find these trades on your own.  Reach out to us about our Inner Circle of Traders (which includes the Spotlight Power Trader System) and let us show you trading for income is possible.

The following two tabs change content below.

Leave a Reply

Your email address will not be published. Required fields are marked *

* :

* :

* :

: