The Real World At Work
I want to quickly go over some of the major reasons why the
WTI Crude Oil CFD is a great instrument to trade besides the fact that the
probability for profit is off the charts using the long term –vegas Big Bang
Algorithm.
PROS
1) Energy
is an international asset class that the world depends on to run efficiently.
Think of this CFD as the energy currency priced in
dollars and cents.
2) Unlike
currency pairs that trade 24/5, and can move at any moment, the WTI Crude CFD,
the vast majority of the time, will move 99% of the time during the European
& U.S. trading sessions respectively. This trading window is from
approximately Midnight – 1:00 A.M. [Chicago
time] to about 2:00 P.M. – 3:00 P.M. [Chicago
time]. Unless the market is news driven, the Asian session is most often very
quiet.
3) 1
CFD = 100 barrels. While the futures contract is for 1,000 barrels per
contract, the CFD offers much better flexibility in
structuring positions throughout the week. If your account has less than $50K
in it, this added flexibility is a great advantage.
4) At
rollover of each trading day, there is no swap fee for either long or short
positions.
5) The
CFD does not expire like a futures contract.
6) The
ability to “hedge” positions at strategically important trade signals. This
cannot be done with futures contracts.
7) No
commissions.
CONS
1) Fixed
margin of $500 per 1 CFD. Ideally, I wish I had greater leverage limits, but
overall this is not that big of a liability. For some people this is probably a
big asset, as it prevents over-leveraging and getting into big trouble should
they ignore the algorithm signals [Gee, that never happens, right?].
2) Spread
of 5 pips. Ideally this would be at about 3 pips, but when you weigh all the
positives, plus an offshore debit card, this is still a great deal.
Just for the record, and so everybody knows, trading hours
are [Forex-Metal server time] Mon 00:00 – Friday 20:45; break at 21:15 – 22:00
Mon – Thursday; CME front month WTI delivery day [From the CME website: Trading
in the current delivery month shall cease on the third business day prior to
the twenty-fifth calendar day of the month preceding the delivery month.] close
@ 19:30.
So, on the 3rd trading day prior to the 25th
of each month, the CFD will close at 19:30 [instead of 21:15] on that day.
One of the big advantages of the long term algo is that we
don’t have to adjust each trading day to the
horizontal line and the necessary buffer of 30 pips. [With the weekly algo we
use 35 pips just once.] Over the course of a week [5 days], this amounts to 150
pips. When markets are volatile [150+ pips from open to high or low of the day]
this isn’t a problem. But take away a day or two or three of intraday
volatility during the week, and now you start to have problems.
As the data proves in the WTI CFD, we do not have these problems
with the weekly data. Our focus changes from daily profits to weekly
profits. Target a fixed profit amount [e.g., 200 pips, or 250 pips,
etc.] and then quit for the week, or follow the signals AND strategy
suggestions for the entire week; it’s really up to you as you
consider how much time you have and what your risk profile is.
The data proves this market will move during the week, and
has done this consistently FOR YEARS to give us the necessary volatility
that the daily algo can miss.
No matter what your risk profile is, or your profit
objectives are, the WTI CFD can get you the kind of consistent weekly profits
you are looking for; far easier than most currency pairs.
Over the next couple of posts I will be going over multiple
strategy scenarios as well as some of the special rules the weekly algo
requires.
Have a great day everyone.
-vegas
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