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Oil Algo Trading Strategy Lost Its Edge?Oil Algorithmic Traders Loosen Grip on Market After Back-to-Back Annual Losses A Shift in the Oil Trading Landscape In the intricate world of oil trading, where fortunes are made and lost on the fluctuations of prices, a significant shift is underway. Algorithmic traders, the computer-driven entities that have come to dominate the market, are pulling back after enduring two consecutive years of losses.1 This retreat marks a notable change in the oil market dynamics, potentially paving the way for a more balanced and predictable trading environment. The Rise of Algorithmic Trading Over the past decade, algorithmic trading, also known as automated or high-frequency trading, has revolutionized financial markets, and the oil market is no exception.2 These sophisticated systems employ complex algorithms and statistical models to identify and exploit trading opportunities at speeds that are impossible for human traders to match.3 Commodity Trading Advisors (CTAs), a prominent class of algorithmic traders, specialize in trend-following strategies.4 They capitalize on market trends by buying when prices are rising and selling when prices are falling. Their ability to execute trades rapidly and efficiently has made them a dominant force in the oil market, often amplifying price swings and influencing market direction.5 The Tide Turns for Algorithmic Traders However, the reign of algorithmic traders in the oil market has faced a significant setback. According to Bridgeton Research Group, which tracks computer-generated trades, CTAs have posted consecutive annual losses for the first time in more than a decade.6 This downturn can be attributed to several factors, including increased market volatility, unexpected geopolitical events, and the inherent limitations of trend-following strategies in rapidly changing market conditions. As a result of these losses, CTAs are reducing their exposure to crude oil.7 It is estimated that they have decreased the weight of crude in their portfolios to a mere 2% compared to 4% in July 2024.8 This pullback is softening their impact on market movements and reducing their share of open interest, signaling a significant shift in the oil trading landscape.9 The Impact on the Oil The retreat of algorithmic traders from the oil market has several potential implications: 1. Reduced Market Market Volatility: Algorithmic trading, particularly trend-following strategies, has been known to exacerbate price swings in the oil market.10 With their reduced presence, the market may experience less volatility and more gradual price movements. 2. Increased Influence of Fundamental Factors: As the influence of algorithmic trading wanes, fundamental factors such as supply and demand, economic indicators, and geopolitical events may play a more prominent role in determining oil prices. 3. Opportunities for Traditional Traders: The pullback of algorithmic traders could create opportunities for traditional traders who rely on fundamental analysis and market expertise. With less competition from high-speed algorithms, these traders may find it easier to identify and capitalize on profitable trading opportunities. 4. A More Balanced Market: The reduced dominance of algorithmic trading could lead to a more balanced and efficient oil market, where a wider range of factors and participants determines prices. The Future of Algorithmic Trading in Oil While algorithmic traders are currently taking a step back from the oil market, it is unlikely that they will disappear entirely. These sophisticated systems still offer significant advantages in terms of speed, efficiency, and data analysis. As technology continues to advance, algorithmic trading is expected to remain an integral part of the financial landscape. However, the recent losses serve as a reminder that algorithmic trading is not without its risks. These systems are only as good as the algorithms and data they are based on. In rapidly changing and unpredictable markets, even the most sophisticated algorithms can struggle to generate consistent profits. Conclusion The retreat of algorithmic traders from the oil market marks a significant turning point. After years of dominating the trading landscape, these computer-driven entities are pulling back, potentially paving the way for a more balanced and less volatile market. While the long-term impact remains to be seen, this shift underscores the dynamic nature of financial markets and the importance of adapting to changing conditions.
TVC:USOIL
by bryandowningqln
Nat Gas: Heating Up into the WinterBrief Overview on Natural Gas Natural Gas is a commodity generally traded on the premise of weather forecasts indicating cooler or warmer seasons. This allows traders to speculate on demand for the product as it generally trades higher with cooler temperatures. Today we are looking at the weekly chart. Thesis: Technical Analysis Pointing to a Bounce This analysis is mainly focused on the lasting demand zone that Natural Gas time and time again respects and typically bounces from. The weekly chart points to the likelihood that the R/R is favorable for a long position at these levels in the 2.20's. Not only do we see NG tap back into this heavy demand zone, but we also can see a Cup & Handle on the weekly chart signaling potential greater upside. Demand Zone offers strong R/R as it dips back in to these levels. Cup & Handle can represent even further upside, but will rely on the initial rebound to prompt the possibility of it playing out. There is also a trendline (not pictured) that is supporting the current bounce we are seeing today from the 2.18/2.19 level. It is important to note that the commodity has been seeing higher lows since the Spring. Lastly, a tap of fundamentals play into this idea as well. Though winter demand is always priced in, this year forecasts have repeatedly painted the picture that this winter will be historically mild. Due to these forecasts implying less seasonal demand for Nat Gas, a shift in the shorter-term and more accurate models as we approach the winter season will sharply move the price of Nat Gas and represents that the current price is truly pricing in a very mild winter. This basis supports the idea of great R/R on this LONG trade idea. Disclosure I am currently in a long position in Natural Gas after entering on the Friday (10/18) Close My position includes: AMEX:UNG Credit Spread 13/12P , AMEX:BOIL common shares If this thesis holds up, I would plan to roll my credit spread contracts into further expirys Thanks for reading! Not Financial Advice
NYMEX:NG1!Long
by ZachSap
USOUSD (Oil) Key support follow up.Thanks for checking our latest update, and happy new year to all. Today, we have followed up on our last oil update. You can see this update on the link below. The main topic of the last update was a key support area. The area held, and we saw a new rally develop. Today, we have looked at that rally and asked if it's going to break the long-term downtrend or if we could see price contnue to remain rangebound. We see short-term resistance at $74.75 and short-term support at $73.20. As always, traders must remain vigilant and stay abreast of the latest updates from OPEC and geopolitical influences, as these factors can significantly impact the market. Good trading from Eightcap.
EIGHTCAP:USOUSD
by Eightcap
GOLD → False Breakout. Can Buyers Recover?Hello, dear friends! Ben here! Gold has made a false breakout at $2,637 and is now searching for strong support. The current situation is highly complex, both fundamentally and technically. Fundamentally, the situation remains challenging. Gold's weakness is influenced by the Fed's hawkish stance and the strength of the US Dollar. However, upward pressure on gold persists due to other factors, including the escalation of conflicts in Eastern Europe and the Middle East, Trump’s protectionist policies targeting Europe and Asia, and rising geopolitical risks worldwide. Technically, after the false breakout at $2,637 (previously a resistance level), the price is now heading toward a new testing zone around $2,622. Below that, the ascending channel support at $2,606 could act as the lower boundary where buyers may start an aggressive play. Key Support Levels: $2,622, $2,606 Key Resistance Levels: $2,637, $2,647, $2,665 Overall, I lean toward a medium-term bearish trend. However, the local situation remains tense and complicated. If the bulls manage to hold their ground within the ascending channel, gold may continue its upward move. But! If buyers fail to maintain their position within the channel, a correction could extend the downward momentum further, leading to deeper declines. Best regards, Bentradegold!
OANDA:XAUUSDLong
by Bentradegold
Today analysis for Nasdaq, Oil, and GoldNasdaq The Nasdaq closed flat due to the U.S. stock market holiday and early futures market closure. The MACD has fallen below the zero line on the daily chart, indicating continued selling pressure. Today's non-farm payroll data will be a key event, as it may determine whether the Nasdaq breaks below the 60-day moving average and continues its decline. On the 240-minute chart, both the MACD and Signal lines remain below the zero line, indicating a persistent bearish trend. This suggests a possibility of further sharp declines, potentially expanding the divergence. Ahead of the data release, the pre-market is likely to remain range-bound. Focus on range-trading strategies but manage risks carefully as the non-farm payroll data approaches. Oil Oil closed higher, finding support near the 240-day moving average on the daily chart. After facing initial resistance around the $75 level, oil found support at the 240-day moving average, indicating a strong chance of another attempt to break above $75. Additionally, support near the 10-day moving average suggests the potential for another upward wave. On the 240-minute chart, a buying attempt is evident as the MACD moves closer to the Signal line. The chart resembles a head-and-shoulders pattern, where the neckline provides support, and the price may be attempting to form the right shoulder. Whether oil will surge beyond $75 remains uncertain, as the divergence in the MACD on the 240-minute chart and potential for time correction on the daily chart suggest caution. Avoid chasing prices at the highs; instead, confirm a breakout before taking action. Overall, buying on dips is the preferred strategy. Gold Yesterday, gold closed higher, continuing its upward trend on the daily chart. The MACD is approaching the zero line, and today's non-farm payroll data will determine whether gold moves above the zero line to resume a bullish trend or sharply reverses, resulting in a MACD dead cross and a bearish trend. On the 240-minute chart, the bullish momentum remains strong, but upcoming events such as today's data and next week's CPI report could create a turning point. Given the potential for trend changes, it’s better to react to established trends. While the short-term trend is strong, range-bound movement in the pre-market is possible, so trade accordingly. Buying on dips remains a favorable approach. As we approach the end of the trading week on Friday, heightened volatility is expected due to the non-farm payroll data. Manage risks carefully, and may you have a successful trading day! ■Trading Strategies for Today Nasdaq - Range-bound Market -Buy Levels: 21,190 / 21,120 / 21,065 / 20,990 / 20,945 -Sell Levels: 21,315 / 21,360 / 21,410 / 21,500 Oil - Bullish Market -Buy Levels: 73.90 / 73.50 / 73.00 -Sell Levels: 74.80 / 75.20 / 75.60 / 76.40 Gold - Range-bound Market -Buy Levels: 2,685 / 2,681 / 2,676 / 2,670 / 2,665 / 2,661 -Sell Levels: 2,700 / 2,705 / 2,710 / 2,716 These strategies are applicable only during pre-market hours. Profit-taking and stop-loss levels are set as follows: Nasdaq: 15 points, Oil and Gold: 20 ticks. If you liked this analysis, please follow me and give it a boost!
CME_MINI:NQ1!
by Futureguard
BITCOIN BTC Machine Learning Approximation Strategy applied GOLDHey everyone. Here's a new trade idea potentially for Gold. I created a a new trading strategy script for Bitcoin, and I tuned the parameters for Gold. The original script is called the "BITCOIN BTC Machine Learning Approximation Strategy by NHBPROD." It implements a simplified Machine learning technique and then produces and output that can be used to buy and sell. The script is only for long trading. I'll attach a link: ( ) to the original strategy script. This is the strategy script, but I also have the indicator script which can be used to automate buy and sell signals directly to your phone, email, or your bot. Anyway, applying the idea to Gold, and tuning the parameters gives me a pretty good backtest, AND it shows that Gold has just entered a buy zone on the daily chart. On average according to the performance, the average trade profit is roughly 2%, so this could be a great time to buy Gold and expect a 2% gain.
TVC:GOLDLong
by nhbprod
GOLD → Resistance retest before falling FX:XAUUSD is consolidating and deliberately approaching the resistance 2667. The upward market structure is focused on a breakout of the resistance. But the other question is whether the breakout will happen, because the sticks in the form of economic data have been in the wheels for a long time now Based on the market behavior, we can assume that before the possible fall there may be a liquidity grab and a retest of the key resistance, as buyers became more cautious after the discouraging data on inflation in China and hawkish Fed meeting minutes. To be honest, gold's current rise is not clear to me as there is no reason for it except for Trump's tariff plans towards multiple countries. Fundamental data is negative, there is no new news from hot spots, the dollar is rising, global inflation is rising, the Fed has become hawkish, there are so many nuances providing resistance to the metal. Resistance levels: 2667, 2675 Support levels: ascending line, 2656 Technically the structure is bullish and in the short term I am waiting for an attempt to break the resistance 2667. In this case a retest of the zones of interest 2675, channel resistance or 2692 from which a correction can be formed is possible. Regards R. Linda!
FX:XAUUSDShort
by RLinda
3
GOLD ROUTE MAP UPDATEHey Everyone, Another Piptastic day on the charts today with our plans to buy dips playing out, as planned. After completing our 2661 bullish target yesterday, we stated that we now had ema5 cross and lock above 2661 opening 2681. - This gave us a nice run of over 100 pips already and the gap still remains open. Any rejections will be opportunities for us to buy dips, allowing us to safely catch pips rather than chasing targets from the top. We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2661 - DONE EMA5 CROSS AND LOCK ABOVE 2661 WILL OPEN THE FOLLOWING BULLISH TARGET 2681 EMA5 CROSS AND LOCK ABOVE 2681 WILL OPEN THE FOLLOWING BULLISH TARGET 2711 BEARISH TARGETS 2633 - DONE EMA5 CROSS AND LOCK BELOW 2633 WILL OPEN THE FOLLOWING BEARISH TARGET 2611 EMA5 CROSS AND LOCK BELOW 2611 WILL OPEN THE FOLLOWING BEARISH TARGET 2593 EMA5 CROSS AND LOCK BELOW 2593 WILL OPEN THE SWING RANGE SWING RANGE 2570 - 2551 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
21
Gold testing key resistance hereGold has been able to ignore the US dollar strength and rising bond yields until now. But since topping out in October, it has created a few lower highs, suggesting that the trend is no longer bullish as it was in the early parts of last year. The precious metal is now testing a bearish trend line derived from connecting the prior two highs. This trend line happens to cut through a key resistance zone between 2675 to 2685. What's more, the 61.8% Fibonacci retracement level against the December high comes in around this area, at 2671. All this makes it an ideal area for the sellers to potentially step in. Can we see a potential drop here? Or will the bulls prevail despite all these technical hurdles? By Fawad Razaqzada, market analyst with FOREX.com
FOREXCOM:XAUUSDShort
by FOREXcom
GOLD Set To Fall! SELL! My dear subscribers, GOLD looks like it will make a good move, and here are the details: The market is trading on 2673.9 pivot level. Bias - Bearish My Stop Loss - 2693.3 Technical Indicators: Both Super Trend & Pivot HL indicate a highly probable Bearish continuation. Target - 2643.0 About Used Indicators: The average true range (ATR) plays an important role in 'Supertrend' as the indicator uses ATR to calculate its value. The ATR indicator signals the degree of price volatility. ——————————— WISH YOU ALL LUCK
OANDA:XAUUSDShort
by AnabelSignals
1
SPY/QQQ Plan Your Trade 1-9-25 : Behind The Scenes ResearchMany of you are following my research and Plan Your Trade videos - watching my SPY Cycle Patterns play out as the markets trade through various phases/trends. What you do not see is the extended research and predictive modeling that go into my deeper research, which aims to help traders. The SPY Cycle Patterns are just one part of my extensive coded solutions related to cycles/trends/phases and other market conditions. Every week, I review and research dozens of market conditions, attempting to determine the current phase, setup, and conditions related to the market and what to expect in the near future. That is why, in many cases, I will be ahead of the trends by 2 to 5+ weeks. You may wonder why I'm able to draw future expected price action often so accurately. This is because of my extended market research (done behind the scenes). My work is not only about the SPY Cycle Patterns - it includes many other more detailed market analyses related to key fundamentals and cycle/phase market trends/setups. In this video, I try to share some of the extended work I do to help traders so you can better understand how all of my research/work ties together to deliver the best information I can. In my opinion, trading is about what is likely to happen now, and attempting to identify what is likely to happen in the near future - so we can prepare and trade efficiently through any market trend. As we take a day off to remember President Carter, I thought you might be interested to see what I actually do every day/week in terms of research and software development trying to help you learn to become a better trader. Stay safe & get some. #trading #research #investing #tradingalgos #tradingsignals #cycles #fibonacci #elliotwave #modelingsystems #stocks #bitcoin #btcusd #cryptos #spy #gold #nq #investing #trading #spytrading #spymarket #tradingmarket #stockmarket #silver
AMEX:SPYLong
by BradMatheny
9
Analysis of the latest trend of gold market: Analysis of gold news: On Wednesday (January 8), spot gold was currently trading around $2,663. Due to the uncertainty of Trump's policies and the turbulent geopolitical situation, the price of gold rose to $2,665/ounce during trading on Tuesday, close to the nearly three-week high set last Friday. However, due to the strong performance of US service industry data and the increase in job vacancies, it was indicated that the possibility of a sharp interest rate cut by the Federal Reserve was reduced. The US dollar index rebounded and the 10-year US Treasury yield hit a new high in more than half a year, narrowing the increase in gold prices and closing at around $2,648.53/ounce. This trading day will usher in the US January ADP employment data (commonly known as "small non-agricultural") and the minutes of the Federal Reserve meeting. Investors need to pay close attention. In addition, pay attention to the speech made by Federal Reserve Governor Waller on the economic outlook at the OECD meeting. Fundamentally, stronger-than-expected new job data and a strong service industry ISM index both indicate a strong economy, but the threat of inflation lingers. It also indicates that the Federal Reserve may slow down the pace of the interest rate cut cycle. It once suppressed the gold price to retreat, but did not change the outlook for gold prices. Looking ahead, in the short term, as Trump prepares to take office in January, his policies will promote economic growth and increase price pressure, making gold prices still face short-term pressure range shock adjustments. But the continued shock adjustment is still laying the foundation for the subsequent rise. Trump's tariff policy will also increase market concerns. During the Trump administration, the US debt situation may worsen and the fiscal deficit may increase, which will fuel the continued safe-haven demand for gold. And the bullish factors supporting gold prices in 2024 are still continuing, and the Fed's interest rate cuts, central bank buying and geopolitical tensions will continue to push gold to new highs. Next, people will pay attention to the December employment report released on Friday to find clues about the strength of the labor market. Also awaiting Wednesday's ADP employment report and minutes from the Federal Reserve's December meeting. Technical analysis of gold: Gold has been running in a contracting triangle pattern with gradually falling highs and gradually rising lows since it fell from 2790 to 2536. After nearly two months of consolidation, the current market has reached the end of the triangle. The upper pressure is currently on the 2790-2726 connecting trend line, and the lower support is on the 2536-2583 connecting trend line. No matter which direction the market breaks in the future, there will be a good unilateral market. Please pay attention to whether the non-agricultural data this Friday and the CPI inflation data next week will form a breakthrough opportunity. At the daily level, it fell 2614 on Monday and bottomed out, then rebounded 2665 on Tuesday and fell back. The short-term long and short continuity is insufficient. Fortunately, the closing lines are all above MA5. The high and low price points in the small range gradually rise, and the overall shock is strong. grid The MACD red column on the indicator continues to increase in volume, the golden cross of the fast and slow line is about to surface, and the long-term trend of the 100-day moving average is good. On the whole, the short-term bullish position of gold is strong, and the probability of an upward breakout in the market outlook is high. In the short-term during the day, the low-long trend is Lord. The short-term oscillating upward trend of gold at the 4-hour level is obvious. After each recent decline, the market can quickly rebound to a new high. Yesterday, the market fell under pressure at 2665, but the K line did not continue to fall, indicating that the current trend is strong. Although 2665 has not been broken many times, in terms of the short-term trend, it is only a matter of time before it breaks. On the whole, today's short-term operation thinking for gold is to focus on buying long and bullish prices when pushing back to lows, supplemented by short selling when rebounding high. In the short-term, focus on the 2640-2635 first-line support at the bottom, and focus on the 2665-2670 first-line resistance at the top in the short-term. Gold trading strategy: 1. When gold rebounds, sell short at the 2663-2665 line, stop loss at 2673, target the 2635-40 line, and look at the 2615-2620 line if the position is broken; 2. Gold returns to the 2637-2640 line to buy, stop loss at 2629, and target the 2655-2660 line;
FOREXCOM:XAUUSDLong
by Caesar_Gorman01
GOLD - Price can rise a little and then make correction movementHi guys, this is my overview for XAUUSD, feel free to check it and write your feedback in comments👊 Recently price grew inside rising channel, where it at once broke $2600 level and continued to grow next. Soon, price reached $2635 level, but at once turned around and made a small correction, after which continued to grow. Price reached $2635 level again and then dropped to support area, exiting from a channel and entering to wedge. In wedge, price made an upward impulse from support line to resistance line, breaking $2600 with $2635 levels. Gold made a correction to support line, and then bounced up to resistance line and recently exited from wedge too. Now, in my mind, XAU can rise a little and then make a correction movement to $2645 If this post is useful to you, you can support me with like/boost and advice in comments❤️
OANDA:XAUUSDShort
by WalterMoon
3