So will I short oil this time? No.
I set a few rules for myself, as I want my trading to be as systematic as possible, traders tend to be make mistake in their trading by their own emotions.
My own rules for oil trading:
1. Buy only when my indicator tells me to buy, or else I'll wait. I rather miss an opportunity rather than to miss my money.
2. Do not short oil. statistics have shown that daily cosumption of oil is more than new supply of oil, so oil price will continue to move upwards in future. I'm predicting that oil price will reach US$250 in 2 years' time.
3. Once I have a buy position on oil, straight away I set a US$5 short below. $5 value means US$500 for super mini oil contract, which is the amount that I can afford.
4. When oil move up higher, I will raise my stop, with a gap of US$4 for volatility. this is to protect my trade from any losses or to secure some profits.
You do not have to follow my rules, if you want you can short oil now since my indicator shows that oil is overbought, but I want to be conservative.
Readers may want to consider open a trading platform that trades super mini oil before the next buy signal comes along.
To open the account, click on the "Oil and Gold" logo on the top right hand corner of the website. Choose Standard account in account opening, Mini account can only be used for trading mini forex. Demo account is available.
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