Crude Oil - Best Strategies (Reversal and Bias with results)

by Andrea Unger

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The Crude Oil future is one of the most-traded instruments in the world. The trend of this market is sometimes strongly influenced by events affecting our society.

Just think, for example, that when the pandemic broke out in March 2020, some maturities reached negative levels, while in February 2022, with the war in Ukraine, prices soared.

In today's video, we're going to talk about two strategies in our portfolio that are making the most of these market fluctuations. 

By watching the video you'll learn:

- How our intraday reversal strategy is structured

- How our intraday bias strategy is structured

- The real performance of these strategies in the last period 

Enjoy! 😎

Transcription

Hey everyone! One of the coaches of Unger Academy here, and welcome back to our usual chat on the best performing strategies of our portfolio in the last period.

Okay, so this week we’re going to talk about Crude Oil futures. So here you can see the price of this raw material which is one of the most important ones in the world, as well as one of the most traded. And in recent weeks, also due to the outbreak of war in Ukraine, its price has sharply risen to levels that we have not seen in a very long time.

Consider that in March 2020, so two years ago with the outbreak of the pandemic, the prices of this underlying asset – on certain expiry dates, to be more precise – reached negative levels. This is a very rare thing to see on futures, but as we've seen and experienced, it is also possible.

So, there has also been a very strong recovery from that collapse due to the pandemic and now with the outbreak of war, this market actually seems to be back steadily above $100, which we know is also a psychological threshold.

This increase in prices has obviously had repercussions on the real economy, because obviously the prices of energy and of all oil derivatives, gasoline as well as fuel for airplanes and so on, have suffered extremely high price increases. And so, all citizens have also lost purchasing power as a result of this price increase due to the outbreak of war.

Today you’ll learn about two strategies that have been able to make the most of these market fluctuations. Both are intraday strategies, because the positions are kept open only for a few hours.

The first strategy we're going to see today is a reversal strategy, which will enter short (for example, as was the case this morning, or rather tonight) when the market goes up. So, if the market is going up, we'll try to sell, while vice versa, when the market is going down, we'll try to buy.

This type of strategy is quite dangerous on a commodities market like this. In fact, you'll need to use very strict filters in order to detect those rare occasions when this market tends to reverse its course rather than continue it, because, as you can see on this chart, Crude Oil prefers to stay in trend rather than reverse it.

However, an automated strategy like this could still take advantage of that. As you can see right here, we got a take profit tonight on this huge gap up that occurred between Friday and Monday and that the strategy was able to leverage.

Let's look at the equity line of the system, which is here. As you can see, it's a really excellent equity line. Here we have data from the end of 2020, so we get to see the whole year in progress.

It's a strategy that, as you can see, can stop working for a long time. Here, for example, months have passed: from April 5 to June 2, so two months.

Here again, you know, same discourse. This is because we've filtered out two months of the year, in particular January and August, when this strategy won't work. In addition, we’ve also used weekly indecision patterns, that from week to week activate or deactivate possible trades, potential orders of the strategy.

Let's move on to the next strategy which is a bias strategy. It is also an intraday strategy. It makes long trades only on Fridays, starting from a certain hour. While the short trades are opened on Sundays, practically the first session of the week.

Because as you know, this future, during exchange hours, also provides 6 trading hours on Sundays. For example, these bars here are Sunday bars. And then after midnight, from here on, it goes to the Monday session.

The strategy will be able to enter in these hours, so the very first hours of Sunday, and then close the positions at the end of the day on Monday.

Also this strategy has made the most of the market fluctuations. It's a bit more volatile than the previous equity, but it's definitely something that makes us hope that it can continue working also in the future. So, guys, try it too!

If there's someone among you interested in the world of systematic trading, you’ll find a very useful link in the description of this video  where you can access a video of Andrea Unger, or get our best seller, "The Unger Method" covering only shipping costs, or book a free call with a member of our team.

If you enjoyed the video, I invite you to leave us a "Like", subscribe to our channel and click on the notification bell to stay updated on the release of all our new videos.

Thank you so much! I will see you soon. Bye-bye!

Need More Help? Book Your FREE Strategy Session With Our Team Today!

We’ll help you map out a plan to fix the problems in your trading and get you to the next level. Answer a few questions on our application and then choose a time that works for you.

BOOK YOUR FREE STRATEGY SESSION NOW >>

Andrea Unger

Andrea Unger here and I help retail traders to improve their trading, scientifically. I went from being a cog in the machine in a multinational company to the only 4-Time World Trading Champion in a little more than 10 years.

I've been a professional trader since 2001 and in 2008 I became World Champion using just 4 automated trading systems. 

In 2015 I founded Unger Academy, where I teach my method of developing effecting trading strategies: a scientific, replicable and universal method, based on numbers and statistics, not hunches, which led me and my students to become Champions again and again.

Now I'm here to help you learn how to develop your own strategies, autonomously. This channel will help you improve your trading, know the markets better, and apply the scientific method to financial markets.

Becoming a trader is harder than you think, but if you have passion, will, and sufficient capital, you'll learn how to code and develop effective strategies, manage risk, and diversify a portfolio of trading systems to greatly improve your chances of becoming successful.