November 17, 2017

Oil: Smart Trading with Profitable Pending Orders

Figure: A perfect breakout in oil price confirmed by candlestick pattern

Trading the oil in shorter time frame can be extremely profitable. Professional traders use the 100 days and 200-day moving average to trade the oil with pending orders. The 100 day and 200-day moving average acts as an excellent dynamic support and resistance level for the oil.

When the price is trading over the 100 and 200 day MA professional traders look for buying opportunity .On the contrary selling interest rises when the price trade well below the 100 and 200 days moving average.

Let’s see an example of pending order trading strategy in Oil:

Trading the oil with 100 and 200-day moving average.

Figure: Trading the oil with 100 and 200-day moving average

In the above figure, the price is trading well above the two moving average which means we will look for buying opportunities only. We will use the 100 days moving average with price action confirmation signal to set our pending orders. Since the 100-day moving average acts as a dynamic support zone, price rejected the dynamic support and formed a bullish pin bar.

With bullish pin bar in action traders put their pending “buy order” right the 100-day moving average. The stop loss for this pending buy order is set right below the wick of the confirmation candlestick pattern. Traders set their take profit level in the nearest resistance level or most recent high. Though the system is very profitable and able to generate lucrative profit within a very short time, traders must use proper risk reward ratio while taking the trade.

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