Brent/WTI Hedging Strategy

Quoting Adabi

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If you don't mind I would like to add something and BTW the top chart shows very good what we are talking about. Thanks for sharing it. Please don't forget the price movement. You all should check out the difference in the daily momentum of each pair. That is difficult in MT4 to compare, but this is another important factor. One of the pairs should move faster than the other "to catch up". Sorry, my English is too bad to explain it better.

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Quoting Peluq

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If the cycle doesn't complete fast. Swap kills this strategy.

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Quoting EventsTrader

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I've been in the trade for 12 days. It's slowly but surely coming back and might just turn positive. We'll see! {image}

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Quoting vpn

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This system boils down to where we think the spread is going. Like any instrument we can draw fancy indicators on a Brent-WTI chart to predict where it's going:{image} At 5.67, it looks like it's going down as we're seeing lower highs. If you're bearish that means we should buy WTI, and sell Brent. For the sake of testing out this system, I did it for fun:{image}

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Quoting vpn

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Results today:

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Quoting Adabi

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@ EventsTrader I am sorry to say, but your lot size is wrong for this strategy. It has to be the equal weighted risk size, not the same lot size. In other words, both have to be as much as possible the same risk. I did test the strategy almost a year ago with daytrades. No overnight trades. The results were good enough that it is still in my mind. My problem was that I did not find a tool that shows me the weighted difference between brent and wti and I was too lazy to do it by hand.

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Quoting vpn

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This system boils down to where we think the spread is going. Like any instrument we can draw fancy indicators on a Brent-WTI chart to predict where it's going:{image} At 5.67, it looks like it's going down as we're seeing lower highs. If you're bearish that means we should buy WTI, and sell Brent. For the sake of testing out this system, I did it for fun:{image}

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Quoting vpn

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{quote} The spread has gone down a few cents since I posted last night - and my trade is also slightly less in a loss. {image} At least I know I executed the trade correctly. Hopefully the spread continues to go down.

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Quoting vpn

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Results today:

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Quoting nastynatty

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{quote} I feel like this will happen a lot. This seems a lot more like an indicator to me than a system, wherein it can alert you of an opportunity but does not work all the time.

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Quoting EventsTrader

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Just letting it ride until it turns positive. It's the ideal system to test for me because it doesn't take that much time once you get it started. Here's where I'm at: {image}

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Quoting Adabi

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@ EventsTrader I am sorry to say, but your lot size is wrong for this strategy. It has to be the equal weighted risk size, not the same lot size. In other words, both have to be as much as possible the same risk. I did test the strategy almost a year ago with daytrades. No overnight trades. The results were good enough that it is still in my mind. My problem was that I did not find a tool that shows me the weighted difference between brent and wti and I was too lazy to do it by hand.

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Quoting vpn

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{quote} Can you explain how to do that by hand? Not sure I follow you. I'll be interested to see what you're thinking.

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Quoting Adabi

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@ EventsTrader I am sorry to say, but your lot size is wrong for this strategy. It has to be the equal weighted risk size, not the same lot size. In other words, both have to be as much as possible the same risk. I did test the strategy almost a year ago with daytrades. No overnight trades. The results were good enough that it is still in my mind. My problem was that I did not find a tool that shows me the weighted difference between brent and wti and I was too lazy to do it by hand.

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Quoting EventsTrader

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Just letting it ride until it turns positive. It's the ideal system to test for me because it doesn't take that much time once you get it started. Here's where I'm at: {image}

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Quoting auricforecas

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{quote} Any updates with this position? How it went? A

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Quoting auricforecas

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And do you think anything sustainable can be drawn for it? Not necessarily (too) longterm/forever but at least for some time, like weeks, months? It might be worth it... I find that some things DO work some of the time, similar to bubbles... They are not bad just had to ride it correctly/timely

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Quoting EventsTrader

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{quote} I've been letting my last trade ride to see if it comes back into positive territory. After 4 weeks in the position here's where it stands: {image} {quote} I don't know enough about this system to say it wouldn't work for anybody. Perhaps it could work for some out there if they had an grasp of when to cut losses or what indication there could be when profits might run. I wouldn't recommend this system at this point the way I understand it though.

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Quoting vpn

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{quote} The spread has gone down a few cents since I posted last night - and my trade is also slightly less in a loss. {image} At least I know I executed the trade correctly. Hopefully the spread continues to go down.

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Quoting vpn

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Anyone trading this lately?{image}

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Quoting vpn

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{quote} Guess not! Here's an update of the spread - still not entering based on this chart yet, however:{image}

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Quoting kamtal

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I like this strategy. Been trading it live for a month or so with good results. My strategy has been buying the UK-US spread at 5 or lower and selling at 5.80 or higher. I will obviously keep an eye on any geopolitical reasons for the spread to blow out, but if there is none I will keep buying/selling in the range of 2 -10 Nice strat that lets me sleep at night with open positions and not check my phone every 5 minutes. {image}

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