Dealing with Report Days in Crude Oil and Weekly and Intraday Seasonal Tendencies

Today was a report day in Crude Oil and we had to navigate through it wisely in the trade room. There are in fact any number of seasonal tendency trades in Crude Oil and I am going to share my observations here with you so you can save a lot of trouble going forward in Crude Oil Futures. There are three basic types:

1) The Weekly Seasonal-  Mondays can be a bit off - especially around the pit open.  Once some cycling commences, it is safer then to catch trends in Crude.  Tuesdays and Thursdays are normal days.  Wednesdays are report day. The market can be tricky before and after the report, so, I like to be more stringent about trade selection before the report only taking higher quality trades in general.  Fridays can also be a bit questionable after the first 1.5 hours or so as many traders leave for an early weekend. Therefore, on Fridays, I am taking only the highest quality trades after the first 1.5 to 2 hours or so.

2) The Intraday Seasonal-  For this I break the day into 3 segments. One, is the first 2-2.5 hours commencing from the pit open.  Two is from that point to about the last 1-1.5 hours.  The period in the middle is riskier as this is lunch and so I will only trade quality here.  The last 1-1.5 hours can catch some good trends and I am more stringent again in the last 30 min.  For this reason, I like to be done earlier in the day as the return for my time is much less past the first couple hours. Further, if you consider #1 above, the best times to trade in CL during the week is fairly limited and the opportunity is best in these windows in general.

3) Reports- Reports are typically on Wednesdays but following holidays can be moved to another time. My rule of thumb for reports is simply do not trade until about 20-30 minutes after the report. Look for proper cycling following this.  Also be aware that the mega bars are designed to be used in "normal" market conditions so false signaling is more likely right after the report or at times when there can be a sudden change in participation of the traders. As for the time before the report, try to go for quality.

What is Quality as I have used it here? Study the rules for trading in the room.  We have three trend indications, the Smart PriceBands, the cycling and the Type2 Momentum Divergence. The highest quality can be when all three of these are true. You can also decide to add another factor off the UTB chart that is in the background of the trading room on the right. If the SmartPriceBand on that chart is in agreement with your trade direction then it is better.  This makes four directional indicators in total.   If you own UTBs and the SmartMomentum tool, you can also look for Type 2 patterns on that chart to support your decision.

From here, if you are inclined to be methodological, you can even have a mathematical scheme for it if you like. For example, if 3 of 4 indications are true (in agreement), for example, then take the next High Volume, Early Entry or combined entry on the Mega Bars. This is part of the beauty of the design of the Oil Trading Room; you can design your own system, with your own rules and trade more, or less as you see fit.

In many trading rooms there is a disadvantage. The proprietor puts on a trade and then tells 50 guys to trade in his direction and scalps out of the trade on paying members trades.  This sounds funny but it is definitely in the realm of reality. With the Oil Trading room, you create your own space. Therefore we can serve many members and none of us are competing. This fosters an environment where members are more inclined to be helping one another (especially the better and more experienced traders); a beautiful thing!

That's all for now....