Thursday, June 04, 2009

Trading oil while standing on your head

More wars have been fought over oil then fought over religion. Take away those two, the only wars left are about freedom, but a distant third. I haven't figured out a way to lay bets down on freedom or religion, but here are a couple of ideas for trading oil.

Here's a Market Club chart on UCO, a leveraged ETF on the price of crude oil:

Using only Weekly Triangles, here are the above annotated trades:

SELL --->12/15/2008----->$13.48
BUY---> 03/09/2009-----> 8.15
SELL--->04/20/2009-----> 7.76
BUY--->05/04/2009-----> 9.14

Current price -------------> 13.02

*Simple rule-based system
*Equal number of wins and losses
* Wins much greater then losses
*Six-month return about 50%
*Low maintenance trend following system

You can tweak the rules to include Monthly and/or Daily Triangles and basically complicate the system any way you want. Buy calls, sell puts, sell calls, buy puts, stand on your head, it doesn't matter, just have some rules and let the Triangles do the rest. If anyone can screw up this system, let me know and I'll publish your accomplishment as a guest blog.

This next trading system is a little more to my liking, draw-downs are smaller and trading is more frequent. It's a Blue Wave 120 minute trading chart:

The prices are shown as a line instead of a bar so you can easily make out the Trend Signals. Add up the trading results yourselves, the Red Wings lost and I'm pissed.

*Simple rule-based trading system
*More wins then losses
*Wins are much larger then losses
*Higher maintenance system, requires hand-holding

Another simple trend following trading system for a volatile commodity with built-in leverage. You can complicate it with options, play with other time frames for more or fewer trades, change the colors or stand on your head. Again, it would be hard for anyone to screw this system up, but if you do, same offer: Guest Blog.

A link to Market Club is on the right hand column and a Blue Wave link is underneath the front page articles, simply scroll down the page.

Or, just stand on your head.



David said...

Allan - what are your thoughts on the uranium sector. It's looking pretty good to me, some nice gains since you mentioned it in January.

I wonder, could this be start of of a new bull market in uranium?

Anonymous said...

How much do you get paid for each marketclub plug? How often are you required to plug marketclub for them to advertise on your site?

Allan said...

How much do you get paid for each marketclub plug?


How often are you required to plug marketclub for them to advertise on your site?


Now a question for you:

How long have you been so bitter?

Allan said...

Re: Uranium

Had quite a ride in uranium a few years back and it seems to be starting up again. I don't take Dines anymore, so I have no fundamental overview and there aren't a lot of pure play uranium charts, at least not nearly as many as other metals. Can't buy everything...............not yet.

The Sound Center said...

Anonymous is not legion.

Anonymous has more quotes attributed to it than anyone else in the world.

I've been using Market Club lately to confirm trade ideas and lower risk. A very simple pool extraction algorith.

Thank you, Allan. I appreciate it.

Anonymous said...

4th wave top in? 951.69 SPX 6:45 this morning PST. Got fingers crossed, toes crossed, eyes crossed

Anonymous said...


What are your thoughts on XO Holdings? Ticker XOHO?

Anonymous said...


Given that Gay Pride celebrations are being held all over the country and Prop 8 makes it legal for gay marriage in CA now:

Where do you stand and how do you trade this ?

Anonymous said...


Don't you ever get tired of jokers & clowns putting up posts like the one above?

Melnikoff, URS