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I am writing this post to find out what futures traders think about when it comes to choosing between trading gold or oil.
I’ve seen that a lot more people trade oil as opposed to gold. Is there a reason for this?
Am I missing something?
I want to focus on one of these two commodities, however I seem to be struggling to find gold futures traders who are doing well. I would have thought oil would be harder to trade than gold.
Depends on your strategy. Oil gives you small moves with rotations if that works. Gold gives you clean bigger moves but not all the time. Many times GC can be choppy and is USD dependent inversely. What is your style and what times can trade? This might narrow down your choice
So if you can trade until about 11 am est u can look at crude and will give u 1 or 2 setups if u wait for the 9 am open to settle
Gold has a micro product to practice but crude does not so be careful being live
Then trade Oil. Gold is on a nice rally and would be good for longer term trend trades, but oil is where the fast money is. Watch that leverage though..
Crude opens at 9 am EST and its difficult to see direction for sometime (some say initial balance is 30 mins some say 1 hour)
There are primarily 2 setups - a breakout and reversal
a) once it meanders or shows its hand (compared to yesterday's value area, high, low etc), you can look for a breakout.. but probably wait for test of that level
b) For reversal you want to see volume spike and then reverse
look at FT 71's setups and see what you think?
Of course this does not lend itself to easy backtesting
I also think order flow and liquidity levels are important to learn
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Over simplifying it a little ...
If the virus is a major problem demand goes down so Oil goes down (and other Commodities & Equities as well), and fear goes up so Gold goes up (and Bonds, Eurodollars and probably the USD and Bitcoin).
If it's a big overreaction and the virus fades out. I think it's far to think that Oil could retrace some/much/all of the $8 it's lost in the last 10 days / $5 it's lost in the last week. Similar for equities, bonds, etc
