Here's a trading method I'm testing on crude oil.
It is still a work in progress but it seems practical and workable specially if you're a scalper. I found the basics on a forex site but tweaked a few things to improve accuracy, make it simpler, and also adapt it to the unique challenges of trading commodity futures.
This is an intraday scalping method. Instead of using regular candlesticks, we use
Heiken-Ashi candles. I find HA candles to be more telling than regular candles and they work well on lower time frames.
I looked at 5 min, 1 min, 15 min, 30 min and 1 hr. I found 15 min to be optimum. Also, HA candles help you hold trades longer without worrying about stop losses or temporary changes in trend. So if and when the time comes, the candle itself will tell you when to exit.
Here are the rules.
Time frame: 15 mins
Indicators: Keltner Channel, Commodity Channel Index (10-period CCI)
Buy trade
- Wait for HA candle to close green in the upper band of the Keltner Channel
- When it does that, check if CCI(10) is at 100 or above. If CCI(10) is below 100 then no trade.
- Based on this, place a market order at candle close and exit trade at 10 points profit target
- Don't exceed the 10 points target
- Instead of using a fixed SL, simply hold trade till profit target is met (OR) exit trade if Heiken-Ashi candle turns red before your profit target is met.
Sell trade
- Wait for HA candle to close red in the lower band of the Keltner Channel
- When it does that, check if CCI(10) is at -100 or below. If CCI(10) is above -100 then no trade.
- Based on this, place a market order at candle close and exit trade at 10 points profit target
- Don't exceed the 10 points target
- Instead of using a fixed SL, simply hold trade till profit target is met (OR) exit trade if Heiken-Ashi candle turns green before your profit target is met.
Example of 2 Buy & 1 Sell trades from yesterday (6 May 2016) netting 30 points.
Test it on live sessions but
strictly stick to the 10 point scalps. You can look for more but I haven't tried those yet.
Leave any feedback here if you can offer any tweaks or ideas.
Hope this helps and adds to this thread.