Brent/WTI Hedging Strategy | Forex Factory

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Brent/WTI Hedging Strategy

  • #1
  • First Post: Jun 23, 2015 10:24am Jun 23, 2015 10:24am
Oil Hedging strategy

this is very simple strategy

place a buy on WTI and sell on BRENT

and target 10$ for each cycle here is an example:
Attached Image (click to enlarge)
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  • #2
  • Jun 23, 2015 11:04am Jun 23, 2015 11:04am
Does your hedge direction based on analysis or you always enter the exact same hedge ?
MT4/MT5 EAs/Indicators/Alerts coder
  • #3
  • Jun 23, 2015 11:17am Jun 23, 2015 11:17am
Quoting FerruFx
Does your hedge direction based on analysis or you always enter the exact same hedge ?
i will enter same hedge continuously one after another , and i am getting 5-6 successful closed cycles for day
  • #4
  • Jun 23, 2015 11:28am Jun 23, 2015 11:28am
Quoting techlover
{quote} i will enter same hedge continuously one after another , and i am getting 5-6 successful closed cycles for day
At a particular time ?
MT4/MT5 EAs/Indicators/Alerts coder
  • #5
  • Jun 23, 2015 11:31am Jun 23, 2015 11:31am
Quoting FerruFx
{quote} At a particular time ?
yes from 10 A.M to 6 Pm my broker time

from London open to 3 hrs after new york open
  • #6
  • Jun 23, 2015 11:34am Jun 23, 2015 11:34am
Thank you for your answers.
MT4/MT5 EAs/Indicators/Alerts coder
  • #7
  • Jun 23, 2015 11:54am Jun 23, 2015 11:54am
Quoting techlover
Oil Hedging strategy this is very simple strategy place a buy on WTI and sell on BRENT and target 10$ for each cycle here is an example: {image}
'Evening ,

I like concise, but please spill the beans a little more <arms folded>.

By $10, you mean just 5 tick imbalance (you seem you be trading $2/tick, so CFD) ?
Do you trade it as a spread or as two entirely separate legs ?
Do you use a chart, if so, how ?
What is typical length of trade/cycle ?
What triggers a new cycle for you ?
If $10 is your target for exit, why in example have you let it go to $26 ?
EDIT - one more, please : why always buy WTI / sell BRN ?

I could probably think of a lot more questions, but a hot bath awaits & it's evening here in NL..... however, for some inexplicable reason I am attracted to this idea, which I think I could be traded within NinjaTrader as a spread.

PS. May I ask where are you in India (a country I love, second only to Italy - I have lived in both) ?
  • #8
  • Jun 23, 2015 12:19pm Jun 23, 2015 12:19pm
Quoting jtrade
{quote} 'Evening , I like concise, but please spill the beans a little more <arms folded>. By $10, you mean just 5 tick imbalance (you seem you be trading $2/tick, so CFD) ? Do you trade it as a spread or as two entirely separate legs ? Do you use a chart, if so, how ? What is typical length of trade/cycle ? What triggers a new cycle for you ? If $10 is your target for exit, why in example have you let it go to $26 ? EDIT - one more, please : why always buy WTI / sell BRN ? I could probably think of a lot more questions, but a hot bath awaits...
In the example i traded 2.00 lot so my target is 20$ but as iam trading manually , at the time of close it closed at 26$ profit

one cycle is 1.00 lot of WTI and 1.00 lot of brent iam using octa trade so the spread is very less

i have tried in reverse also like sell wti and buy brent , it is taking a lot of time to close and some ties the draw down is more , so i prefer trading buy wti /sell brent
  • #9
  • Jun 23, 2015 12:28pm Jun 23, 2015 12:28pm
The famous WTI/Brent spread strategy...never tried it..in theory should work

http://www.quantpedia.com/Screener/Details/100

http://econstor.eu/bitstream/10419/9.../783913591.pdf

...
  • #10
  • Jun 23, 2015 12:34pm Jun 23, 2015 12:34pm
Quoting techlover
{quote} In the example i traded 2.00 lot so my target is 20$ but as iam trading manually , at the time of close it closed at 26$ profit one cycle is 1.00 lot of WTI and 1.00 lot of brent iam using octa trade so the spread is very less i have tried in reverse also like sell wti and buy brent , it is taking a lot of time to close and some ties the draw down is more , so i prefer trading buy wti /sell brent
Tks, tl - keeping it close to your chest I see

Tks also, merquise...
  • #11
  • Jun 23, 2015 12:37pm Jun 23, 2015 12:37pm
Quoting merquise
The famous WTI/Brent spread strategy...never tried it..in theory should work http://www.quantpedia.com/Screener/Details/100 http://econstor.eu/bitstream/10419/9.../783913591.pdf ...
Thank you merquise will have a look
  • #12
  • Edited 6:45am Jun 24, 2015 6:19am | Edited 6:45am
how long hav u been using strategy.... are u live with it
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #13
  • Jun 24, 2015 6:55am Jun 24, 2015 6:55am
Quoting Soros
how long hav u been using strategy.... are u live with it
i have been trading with this strategy around a month , yeah i have been live with it
  • #14
  • Jun 24, 2015 7:03am Jun 24, 2015 7:03am
Quoting techlover
{quote} i have been trading with this strategy around a month , yeah i have been live with it
whats the acc balance? im just tryna see how much lots to trade at what acc size
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #15
  • Jun 24, 2015 7:06am Jun 24, 2015 7:06am
Quote
i have been trading with this strategy around a month , yeah i have been live with it

Was it profitable today as you described above???

I tried it today on a demo and so far I have made no profit yet nor have I been close to profit and it has been around 7 hours since the trades were opened.
  • #16
  • Jun 24, 2015 7:11am Jun 24, 2015 7:11am
Currently the brent wti spread is very low. But there has been times when it got higher. Be careful you might get stuck in a losing position when it is rising again.
  • #17
  • Jun 24, 2015 7:15am Jun 24, 2015 7:15am
Quoting xpie
Currently the brent wti spread is very low. But there has been times when it got higher. Be careful you might get stuck in a losing position when it is rising again.

please exlplain
I am what Many Dream to be but only a few can achieve, im a part of the 1%
  • #18
  • Jun 24, 2015 7:21am Jun 24, 2015 7:21am
Quoting Soros
{quote} please exlplain
well in 2011 the price difference between wti ans brent as been almost 30 usd. so it doesnt mean that it is always fluctuating around an almost equal price. see this chart https://ycharts.com/indicators/brent_wti_spread
  • #19
  • Jun 24, 2015 7:25am Jun 24, 2015 7:25am
Hello everyone, I'm not sure, but I think this strategy will not OK to live account. I think that this broker disables and removes money. Tested anyone?
thanks
  • #20
  • Jun 24, 2015 7:35am Jun 24, 2015 7:35am
Quoting xjonasx
Hello everyone, I'm not sure, but I think this strategy will not OK to live account. I think that this broker disables and removes money. Tested anyone? thanks
LOl why will broker disable and remove money ?

we are not doing any thing wrong here , Market makers may ban you , go with ECN brokers
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