Devil's tar, texas tea black gold are all nicknames for one of the most important commodities on this planet: oil. In fact, it's so important that it was able to afford a family of hillbillies, a luxurious life in beverly hills. Jokes aside, it's tough to dispute that oil plays a key component in our economy. Announcements related to this commodity typically have worldwide ramifications.

Countless traders and investors track the price of oil because it truly has market moving power. The amount of money involved in oil is unbelievable, and i'm here to show you one way you can profitably trade it. What's going on everyone, i'm matt, and in this video i will be discussing an oil trading strategy that recently made me five thousand dollars in one day. This won't be a wishy-washy explanation.

I'm going to fully explain the entry and exit rules, so you could perfectly replicate this strategy if you want to at the end, i will show you the historical performance results, so you have a better understanding of how it's done in the past. If you do choose to use this trading strategy, you should know that past performance isn't always indicative of future results. I'm not a financial advisor and, following my advice, could lose you money, but hey. It can make you money too.

My point is that the choice is yours and yours alone, before we dive into it. I want to take a moment to thank the sponsor of this video. We would like to thank all dinosaurs for making oil and this video possible without you guys, who knows where we would be hit the like button to show support for our extinct. Friends all right now, let's discuss the specifics of this strategy.

It is meant to be traded on the oil futures market and is a short strategy. This means that when all of the entry parameters are true, you would sell oil. Then, when any of the exit parameters are true, you would exit the position to profit. You would be looking for a decline in the price of oil between your entry and exit points for this strategy to short oil.

Three things must be true. The first rule is that it must be a friday. The second rule is that the opening price has to be lower than the closing price of the previous day as in thursday. The third and final rule is that the closing price of the current day has to be in between the opening and closing price of the previous day.

This is known as an in-body day. If these three conditions are met, you would short oil on the next market. Open once you have a short position, there are three possible exits. The first exit is a profitable close if the market closes at a lower price than your entry price, which means you're in profit, because you have a short position, you would exit when the market opens.

The next day, the second exit option is your stop loss. You would place a stop loss at an increase of 1.5 times the average to range over the past 20 days. Obviously, this is something that you don't want to happen, but it's better than taking an even larger loss. Trust me oil can be extremely volatile, so it's best that you use a stop loss as protection.

The third possible exit is a max hold time. If you have the short position for three days and there's been no profitable close and your stop loss hasn't been hit, you would exit when the market opens on the fourth day. Those are all the entry and exit rules for this strategy. If it's a friday, the opening price is lower than the closing price of the previous day, and it's an embody day.

You would short oil the next time the market opens. Then you would exit the position after a profitable close when your stop loss is hit or after three days pass. Whichever comes first awesome, you now know the entire strategy. I want to remind you that this strategy is meant for the oil futures market, which is highly leveraged.

This market moves in increments of a cent like a normal stock, but each cent actually represents ten dollars. This means that a one point move is actually a swing of a thousand dollars, as you can imagine, both gains and losses can add up very quickly. With that in mind, let's take a look at how this strategy has performed. Historically, as the saying goes, when it comes to trading the pass, doesn't repeat, but it often rhymes to start things off.

Let's take a look at the most recent time that this strategy traded all three entry conditions were true on friday, the 13th, which triggered the strategy to take a short position on the next open, which was at 40 and 11 sets. Then because the close was a profitable close, the position was exited on the next market open at 35.05. The difference between the entry and exit values was 5.06 and due to the leverage of the oil market, this was a profit of just over five thousand dollars beyond making a profit on its most recent trade. This trading strategy has been profitable historically as well.

Over the past 19 years, this strategy has traded 125 times. 91 of those trades were winners, which means that this strategy has a 73 accuracy rating. On top of that, the profit factor was just over three, which means that the gross profit is three times larger than the gross loss. Finally, let's take a look at the equity curve for this strategy since 2001, this strategy has been trending upwards, but it did do exceptionally well in the 2008 time period.

I wanted to quickly touch on the backbone of this particular strategy, which happens to be the concept of shorting the oil market on a monday on the screen. Now are the results of just that taking a short position when the market opens on monday and exiting when the market opens on tuesday. As you can see here, the profit factor and the percent of winning trades aren't amazing, but they do tell you that there's a bias towards the oil market dropping on mondays, here's the equity curve for this simple concept. After studying this, i chose to add in two more entry filters to help smooth out the equity curve which produced the strategy that i presented to.

You today feel free to take advantage of this monday weakness by building your own trading strategies. I'm sure there are various ways. The strategy i highlighted today could be improved upon. If you want the code or any of the analytical reports for this strategy, let me know in the comments below, if you're interested in learning about other trading strategies subscribe to my channel.

I put out new content every week thanks for watching. I truly appreciate the support best of luck. I hope you have a great day come and listen to my story about a man named poor mountaineer barely kept us never said that one day he was shooting at some food and through the ground, kimberlyn crude. All of that is black gold.

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