Energy Futures

Category Archives: Energy Futures

Trading Crude Oil Futures

June 13th, 2018 Filed under Commodity Brokers, Commodity Trading, Crude Oil, Day Trading, Energy Futures, Futures Broker, Futures Trading, futures trading education, Options Trading, Trading Guide | Comment (0)

Tips for day trading NYMEX crude oil futures

By Ilan Levy-Mayer, VP Cannon Trading Co, Inc.

When it comes to day trading futures contracts, crude oil futures are assumed one of the leading positions as far as trading volume.


During the month of May 2018,  crude oil futures averaged around 1 Million contracts traded per day! That actually surpasses contracts like the ten-year notes, mini SP, mini Nasdaq and others who have traditionally been leaders’ in terms of volume.


Part of the growth in crude oil futures is attributed to day trader participation. Day traders, by definition, will enter and exit their positions during the same trading day. This adds volume to the market traded.


Some of the tips I am sharing below can be applied to most futures contracts as well as other financial products that are traded like stocks, forex, bonds and others. Some of the advice I am sharing is very specific to the crude oil futures trading field.


  1. Know the product you are trading:


  1. Just like a trader who trades a stock like Facebook knows what Facebook does, when its earning reports are due and other factors, so does a crude oil futures day trader needs to know a few facts about crude oil:


  • Contract Size: Crude Oil Futures consist of 1,000 barrels. For the trader this means that each full $1 move in crude futures = $1,000 against you or in your favor.


For example:  A move from 72.10 to 73.10 = $1,000 and a move from 72.10 to 72.11 = $10 (the minimum fluctuation size or the tick size). Be aware that the CME also offers the mini crude contract,  which is half the size.


  • Trading Hours: Crude oil futures trade on the Globex terminal between the hours of 5:00 PM CST the DAY BEFORE to 4:00 PM CST the following day. Which means 23 hours of straight trading. It is important to know that most of the volume will trade between the hours of 8:00 AM CST and 1:30 PM CST, as these hours correspond to the “pit session” of the old trading floor.


Another key aspect to remember is that crude oil is a deliverable commodity and the “front month” will change every 30 days or so. For example: since May 22nd 2018 we have been trading July crude oil.


  • Reports: There are more than a few reports that will affect crude oil future prices indirectly. These include monthly unemployment, the FOMC rate decision, and a few others.


However, there are two major reports that move crude oil futures and its by-products (unleaded gasoline and heating oil) sharply: The API report, which comes out at 3:30 PM CST every Tuesday, and the DOE (Dept. of Energy) inventory numbers, which come out almost every Wednesday at 9:30AM CST.


Take a look at this one-minute chart from Wednesday, May 16th right around the report time below to understand the volatility involved.

As you can see above, the market made a move of $700 per ONE contract in a matter of minutes, perhaps even seconds! That type of risk and opportunity is one of the factors attracting day-traders into the crude oil market.


  • Geo Political Events: Middle East tensions, the Iran nuclear deal, tensions between Iraq and its neighbors…these are all examples of events that affect crude oil prices. Not to mention OPEC meetings!



  1. Trading Personality:


In my opinion crude oil (like many other markets) will have one of the following 3 modes: trending, two-sided volatility, or Choppy/quiet/range bound trading.


My experience is that crude will more often fall into the first 2 categories:  strong trend or two-sided volatility.  This leads me to my next point below, different trading set-ups.


  1. Trading Set-Ups:


My preferred methods for trading crude are either breakout concept in an attempt to catch a strong move up or down once the market broke some key support or resistance levels, AND/OR counter trend methods to take advantage of when the market is oversold or overbought. Crude does seem to bring more fear and greed out of traders. So looking at RSI levels, for example, and using moving averages ON the RSI to try and get a feel for market reversals are methods worth exploring.


  1. Keep a journal:


Like with any other trading, keep a journal. Take notes on how the market reacted to certain reports, how the markets traded during certain times of the day, and action you took and emotions you had that either helped or hurt you while trading. These notes will help you going forward.


In summary, crude oil futures volume has increased significantly these past few years. The crude oil futures offer traders certain dynamics that other markets may not at certain times. Volatility, fear and greed are key traits for this market. Remember that trading crude oil futures specifically and futures and options in general carries a large degree of risk and is not suitable for all investors. Make sure you consult with a series 3 broker if you never traded this market before. As always, I wish you Good Trading!


Important: Trading commodity futures and options involves a substantial risk of loss.

The recommendations contained in this letter are of opinion only and do not guarantee any profits.

There is not an actual account trading these recommendations.

Past performances are not necessarily indicative of future results.

Energy Futures Outlook 5/15/2018

May 14th, 2018 Filed under Energy Futures, Future Trading News | Comment (0)


Voted #1 Blog and #1 Brokerage Services on TraderPlanet for 2016!!  


Dear Traders,
Oil Market Dynamics in Play: What to Watch in Coming Weeks
By Blu Putnam, Chief Economist, CME Group
Oil: Will Mideast Risk Premium Rise Before Driving Season?
  • U.S. shale oil production can respond faster to price changes
  • Ramp-up in U.S. production could be tempered by drilling challenges
  • U.S. oil exports have changed the dynamics of Brent-WTI price spread
 Unleaded Gasoline Daily Chart for your review below:
Unleaded Gasoline Daily Chart 

If you like to set up a time and chat with a licensed series 3 broker, pleasecontact us.

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Crude Oil & Gold Futures Renko Charts; Economic Reports & Levels 10.08.2014

October 7th, 2014 Filed under Commodity Brokers, Commodity Trading, Crude Oil, Energy Futures, Futures Broker, Futures Trading, Metal Futures | Comment (0)

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!


Another two markets I like to touch on when it comes to “other markets to daytrade beside the mini SP 500” are Crude Oil Futures and Gold futures.


More than a few similarities between the two markets.


They are both volatile, can move VERY fast. I have seen some very large moves happen in matter of minutes if not seconds. The “fear & greed” factor really plays a role in these specific two markets.

Both have active trading hours starting with Far East trading around 10 PM est all the way to the next morning until about 3 PM est. Good volume generally speaking but not close to the mini SP or ten year notes. So you may see some slippage on stops but the volume is more than enough to trade size.

Each tick on gold is $10, so every dollar move =$100 against you or in your favor. Crude is similar, each tick = $10. One full $1 move = $1000.

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Bonds Futures and Crude Oil Futures Unique Patterns

October 1st, 2014 Filed under Crude Oil, Day Trading, Energy Futures, Financial Futures, Futures Trading | Comment (0)

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Time sure does tick a bit different in the commodities and futures world….

Some traders know time has passed quickly when it is time to change to the Dec. contract versus the Sept. contract, others may notice it when they think “wow, monthly unemployment is this Friday, time sure flies…” and still other traders, perhaps professionals and money managers notice it when one month ends and another starts and it is time to share monthly results with their clients…..

Either way you look at it, hope October will be a great trading month!

Today I noticed a couple of market behaviors I have noticed in the past and wanted to share with you.

The first is us Bonds trading behavior on the last trading day of the month on the last 15 minutes of the old pit session, i.e. 13:45 to 14:00 central time.

While I did not spend any time trying to predict the direction of the move, I seen it many times, the bonds will make a 10-15 ticks ( 15 tick in bonds = $500 per contract) move during the last 15 minutes as large traders position themselves ahead of months close.

Below is a 15 minute chart of Bonds from today….notice the very tight range all day long until the last 15 minutes….if you go back to the last trading day of the month, you will notice this pattern more often than not. Of course, I leave the important work to you…and that is which way and how can one try to take advantage of it….PS: My trade system below missed entering the short by 1 tick )-:


Custom USA - 30Yr US Treasury Bonds (Globex), Equalized Active 15Min Continuation

Custom USA – 30Yr US Treasury Bonds (Globex), Equalized Active 15Min Continuation


The second pattern for you to investigate if interested is the behavior of crude oil futures around “round numbers”. Today was obviously a HUGE move in crude ( down over $3 or $3000 per contract or 3.5%) but notice the 10 seconds chart I am sharing with ( yes, seconds, not minutes…) of what happened when crude broke below 93.00 and 92.00 today…..Once again, the million dollar question, how and can you take advantage of it? Obviously in this case it seems like there were MANY sell stops placed right below the round numbers which resulted in another accelerated move to the down side.

Crude breaking below $93.00


CLE - Crude Light (Globex), Equalized Active Continuation, Primary Session, 10Sec

CLE – Crude Light (Globex), Equalized Active Continuation, Primary Session, 10Sec


Crude breaking below $92.00

CLE - Crude Light (Globex), Equalized Active Continuation, Primary Session, 10Sec

CLE – Crude Light (Globex), Equalized Active Continuation, Primary Session, 10Sec


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Crude Oil Futures Testing Major Weekly Support Level, SP500 Volatility Higher + Levels for 8.6.2014

August 5th, 2014 Filed under Commodity Trading, Crude Oil, Day Trading, Energy Futures, Future Trading News, Index Futures | Comment (0)

Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Volatility has picked up again! Make sure you adapt as markets are always changing and what may work for range bound/ low volatility days will not work for wide range/ higher volatility days.

I see major support for SP500 at 1795 and it will be interesting to see price reaction if we test this level in the next few days.

On a different note, I wrote a quick analysis along with chart for Crude Oil futures at:

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  • Using range Bars for Day-Trading
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