Oil day trading/scalp strategies

C2
1

Hello,

The events of the last two weeks have me curious. Is it really THAT hard to trade oil with proper risk management? Not invest and hold but scalp and day trade with stops in place. When the answer isn’t clear, I set to find out.

I’ve created a little day trading/scalp CL strategy to really see what the problem is. I’m not at all the normal scalp trader so I have that going against me. At the same time I’m really interested to see the results. I’ll set some rules to really find out if day trading oil is impossible.

I also need some witnesses. Not a lot. I’m going to put out a coupon with a catch. If you ever signed up for “Payoff Matrix” using a coupon, you may NOT use this coupon. Why? Because you know I use stops and my outlook on risk management. Here’s the exception. If you are a paying investor of “Payoff Matrix”, you’re more than welcome to use this coupon.

Coupon code:
UGSG49575

Coupon expiration:
The last day in January at the U.S. market close

I’m calling this CL strategy “Forties Pipeline”.

Here are the rules:
Trading hours: 5:00 to 16:15 New York time
Most likely trading hours: 9:30 to 14:30 New York time
Contract size maximum: 3
Stops?: Yes, attached to every order
Instruments traded: only oil (CL)
Overnight positions: no everything liquidated by the close

Stop placement risk:
Risk: 1% to 2% of my capital (the majority of trades will fall in this category)
Absolute max risk: 5% of my capital (not likely)

The majority of trades will stay within the 1% to 2% range. Not 2% per contract but 2% of the entire position. If the entire position is 3 contracts, all 3 contracts combined will have a stop set that reflects 2% risk. If the entire position is 1 contract, the stop will be placed to reflect 2% as that would be the entire position.

I have no idea what to expect from this. Again, I’m not normally the scalp trader so that’s a disadvantage.

Good day

2

Why is your system not TOS?

3

Why it should be? He wrote that he never done this before, why to risk own money? A lot of wealthy subs around. :wink:

4

Sorry I was referring to his main strategy Payoff Matrix which has done really well and has a good following.

5

Reason can be the same.

6

Would love to know how you are pulling off a scalping strategy in the C2 enviroment. Since scalping is a special trading style that takes small profits on small price changes (generally soon after a trade has been entered), it is best executed on a trading platform that is far more robust than what C2 is able to provide. It requires a strict exit strategy, because one large loss could eliminate the many small gains.

2 Likes
7

I must be missing something here.
Just looked at your “main” strategy, Payoff Matrix. It is less than two month old, and you already have subs that are risking they own money.
wow!!!
Mind blown. :smiley:

Good job on marketing them I guess.
Good luck! I truly hope it will not blow up.
Doesn’t seem like you are risking your own money, at least not TOSing it here.

8

Day trading/scalp. Not only scalp. You’re thinking pure scalping in the traditional trading sense where the trader is going for a few ticks and takes 50 trades a day. Not at all what I imagine this would look like.

Just trying to get answers for myself about the viability of trading oil especially in light of what we just witnessed the last few weeks. The main question I’m trying to answer is can any strategy make money trading CL with proper risk management and only day trading.

9

Yes, my strategy can, very profitably. I soon will become a new Trade Leader in C2, and you may sub to my strat./George

10

Good luck @GeorgiosPlatis

Impress me.

11

I will. In the menatime, you can send me yr email if you like in order me to send you detailed info (charts, tests, etc), but please do it only if you are seriously interested. Thank you.

12

Hello @GeorgiosPlatis

I’ve been at this game longer than you were born. No chart or test is ever going to impress me. I have charts that WILL blow your mind. On the day of the crash, I mentioned something about the YM closing 24090. That’s from my chart and that was done before futures opened on Sunday night. I have investors and sent them some charts for Monday before the Super Bowl started.

When I started in this game, stocks were priced in 1/4s and 1/2s. In the futures market, it was all families in Chicago back then. A kid would put up a small amount and was backed. He had to work it off and that’s how he got his start. He was basically getting a loan to start his trading business. That’s why the O’Hare trade was possible. You’d have a trader that might have normally been a 1 lot trader. One day he goes crazy and puts on 100 lots or more. It didn’t matter what he had in his account because he was on the floor. By the time his clearing firm found out, it was too late. Or he hit a home run. Those guys didn’t last. These days that’s not possible because your broker won’t allow you to put on a 100 lot without the margin. Guys blowing up isn’t something new. It’s been happening for a long time. Those guys back then didn’t hit their nut and on one trade bet everything.

I manage money. On this platform, my AUM (assets under management) stands at $3,119,400 at this exact time. I manage money outside of this platform with a larger AUM.

The way to impress me is to start trading. Your results will impress me. Not just winning results. I may be impressed with losses also. But a fair warning that I am EXTREMELY difficult to please. I will hold you to the highest standard. With my endorsement, you WILL get at least 30 investors that will jump on your strategy. Showing me a chart isn’t going to win me over.

To me, a chart or back test doesn’t tell me the full story. All these guys last week had great charts and great back test results. What happened? It wasn’t their chart. It was their emotion. It was the fact that they used the word “I think”. I think the market went too far. I think the market will come back. The market could care less what these guys think or want. At that very moment, they stopped looking at facts and wanted the market to conform to what they wanted. Well guess what. There’s someone on the other side of that trade with more money wanting the opposite. A trading record tells the truth. Some of these guys that lost $50,000 this last week, you could have handed them the best trading system in the world and they would have found a way to blow up. Why? Because they were standing in their own way. There biggest obstacle to success was them. By the same token, I talk to traders from all over the world on a daily basis. These are some of the best traders. They aren’t on this platform. They could literally do this with their eyes closed. You could give them a terrible system and they’ll find a way to make money with it.

Trading isn’t only about results. Those will come when you start trading properly. Trading isn’t only about risk management. That’s just the fundamentals. Say a trader takes a particular trade. Doesn’t matter what it is. It could be a simple moving average system. If he doesn’t take every opportunity defined in his trading plan, that’s a problem. Why? He’s trying to figure out if this next trade is going to be a winner or not. That’s a fools game. His first problem was to say “I think”. I think this trade won’t work so I won’t take it. The reality is he doesn’t know. I don’t know. And nobody knows. His whole thinking revolves around that one trade. Instead he should focus on the bigger picture.

One of my investors mentioned he was very disappointed with a particular system. This system used options to manage risk. My investor mentioned that this trader had so much experience. On the day of the crash, this trader got out of options basically removing the risk management. Why? Because he used the word “I think”. I think the market went too far. That’s why my investor was disappointed. Not more so with the money lost but because he had trust in this trader. With all that “experience” this trader had, he still let other factors dictate his trade. He stopped looking at facts. I don’t know what system my investor was talking about but from just reading it I could hear the pain in his voice. Trust broken was worse than money lost.

George you may be a great trader. I don’t know that yet. Put up your system and I’ll see your results. Digging up a post that’s a month old with no activity and posting that you’re able to trade is worrisome to me. Just being honest. To me that’s a red flag. I’m looking at everything not just results.

Good day

4 Likes
13

Hello PayoffMatrix,

first of al,l thank you much for your reply.

PayoffMatrix, you said many things in your email. To the most of these things I aggree, to others I see some exaggeration. But what really surprised (and amused) me was your phrase (… longer than you were born !!). Do you know my age or the time I am in this game? how you can tell such things to a person that you dont know ?

Now, to the point :

  1. I am probably older than you ( I am 62 years old).
  2. I am Electrival Engineer M.Sc. for 37 years.
  3. I am in trading business (Trader && Trader systems developer and coder) for more than 17 years.
  4. I have created and coded many strategies (for futures) and created my own proprietary and unique indicators.
  5. I am working on NinjaTrader enviroment.
  6. I have never published my strategies, which I keep and use only for myself, and, this is the first time I am close to connect with C2.
  7. The strategy I would like to offer (for public use) to the C2 is a very stable, reliable and very profitable strategy.
  8. Some strategy’s characteristics : It is a fully automatic strategy. It trades CL, GC, 6E, FDAX , etc. The one I will present to C2 is trading CL only. It requires an initial capital not more than $15k. It makes profit $70k – $100k/year. It trades 4lots/trade and makes ~200 –250 trades/month. It triggers only MIT orders. It runs 25/4, but stops at the end of each day session and starts at the beggining of the next day session. It is based on 3 of my proprietary unique indicators (created by me). It has been baacktested only via Market replay (month-by-month for maximum reliability) for the past 14 months. Every month is “positive” (in terms of profit), so far. It is not for mechanical use (only for autotrading).
  9. I am absolutely confident that my strategy will be positively accepted by many C2’s investors and other traders, who are interested in trading Crude Oil (CL) futures.
  10. The reason I wrote to you is that I saw (accidentally) your comment in a C2’s forum; you were wondering if there is a winning strategy for CL around, and I thought that it would be a good idea to tell you, yes, there is a strategy (and of course many others) that can win in CL’s trading business.
  11. Very soon I will start trading my startegy in C2 (probably by the end of this month) and you will have the chance to watch it. So, please be patient and you will see what you like…
  12. For now, please see attached some backtest results of my strategy (via Market replay, as I said), as well as some of relative charts (showing, among others, my 3 indicators, as I said above).
  13. Sorry, for my English (it is not my native language), I live in Europe.

Any comments from will be welcome.

Sincerely

George Platis
Dipl. Electrival Engineer, M.Sc.
Trader && Trader Systems Developer

CL##-## __ April 2017 __ MARKET REPLAY __ .GIF2564×1413 238 KB

CL__JANUARY2017 __S77f..GIF2565×1688 287 KB

14

Hi George, welcome back to C2.

I don’t want to criticize your charts but those bar types are nothing new. They are just curve fitted renko type bars. The problem with these types of bars is that during extreme chop you will get stopped out quite a bit since I have used them before. They are good for trendy days.

But if you have certain rules that you can apply to them and stay consistent you can still make some money but don’t expect these bars to be the holy grail of systems since the company/person that sold them to you probably made more money from selling them than trading with them.

good luck!

15

First the good news: welcome to C2! Now the bad news.

HFT systems like yours have a hard time replicating their stellar results from other environments. I refer you to this thread regarding McProtrader (a system which just blew up by the way).

And in particular Matthew’s explanation why results flatten as soon as a system takes on abundant autotraders:

“For strategies without AutoTraders, Collective2 assumes that – in the case of limit orders – you will get filled at a bid (for Sells) or at an ask (for Buys). In real life, this doesn’t always happen, because orders that do not “trade through” the limit (i.e. go above or below them) may not have sufficient volume in the marketplace to fill all bids or asks that are posted. Yes, some orders will get filled, but it is not guaranteed that all will be filled, nor (more importantly) that all C2 Members’ orders will be filled.”

So once autotraders appear, the final price of a fill in the C2 record is the average of what all those subscribers realized in their actual accounts. Here are a couple examples of systems that experienced “the autotrader performance hit” (I’ve indicated the date when autotraders appeared – you can look at the before and after).

If your system is trading 200-250 times a month, I would predict that with autotraders piling on you will either be flat or slightly positive in a typical year, as compared to the 400%-500% annual gain you claim.

McPro
McPro1235×739 70.7 KB

Quant
Quant1231×783 79.5 KB

16

Hi AlgoSystems,

My strategy is based on my 3 private proprietary indicators which, most of the time, overcome any choppiness during the day session, as you can clearly see in my charts. The “cooperation” of these 3 indicators (never published or seen before publicly) is the big advantage that makes this strategy very succesful.
Please also note that this strategy triggers MIT orders (“market if touched” orders) for additional safety.
On the other hand the “length” of the bars I use in my charts has carefully selected in order to absorb the maximum “market noise”.
Additionally, the code of this strategy (written by me) has, among others, extra provisions in order to keep DD to very low levels.
The reason that you “…have used them before…” (as you said in your email) does not make sense at all , because you dont have my indicators and the code of my strategy (which is surely from your code) ! The bars may be the same , but the indicators and the code of the strategy are completely different.
You also say “… dont expect of the b a r s_emphasized text_ to be the holy grail of systems …” Again, the bars is only a part of a system. The other (and most important) parts of my system are my 3 indivators and my code of the system (entry/exit rules, etc.).
Bottom line : Your criticism is dealing only with the bars of my system, not the “heart” of my strategy (something which anyway you dont know) .
Consequently I welcome your criticism, but I consider it as groundless and unsupported.

Thank you.
George.

17

Hello MarkAmspoker,

thanks for your email. Here is my answer :

My system triggers only MIT orders (“Market If Touched” orders). This GUARANTEES (100%) that ALL orders will get filled at the time the market price “touches” the predetermined by my strategy target(s).

So, your statement " … but is not guaranteed that all be filled, nor (more importantly) that all C2 members’ orders will be filled…" is completely false and untrue regarding my system, and, cetainly, does not make any sense.
So, your “prediction”, which is based on your above false/untrue statement, is completely false and untrue.

Thanks
George

18

Thats fair enough, since you only showed the charts and no mention of the indicators or anything else I assumed thats all you had.

Anyways, good luck!

19

But why are you talking about your strategy and hiding it?

20

Anyone else catch this?
Can’t wait to see this one… :popcorn: :boom: