USO ( Oil Futures ETF) Swing Trade Review LONGThe idea was that while US Oil is not directly affected by the tensions in the Middle East as
most of it is domestic consumption, what portion of it that is exported does not go through the
Suez Canal but rather across the Pacific to Asia mostly. The idea was expanded by no matter
that, the Middle East quagmire affects global oil prices all intertwined. The China recession
is a drag on oil prices as is Russian sales below market but no matter the shipping costs have
gone up and so also the price of what is being shipped.
The 30-minute chart shows the trades based on the premise of a volume profile with the
evolving high volume area between the blue lines and price simply a black line. As the price is
supported by the lower black line and resisted by the upper black line and the price is expected
to rise, the trade plan was to "buy low" when the price dropped to the lower black line with
two lots of shares. When the price rose to the upper black line sell one of those lots and run the
other to gradually acquire more shares and average up. A high-volume area breakout 3 days
ago was also used as a buy signal.
As of the present, the trade is carrying five lots of 10 shares each. Profit has been pulled out
in partials each time a lot has been sold at a red down arrow. The trade close signal will be
from the RSI indicator when the fast RSI line in green goes under the slower red RSI line.
Upon closure, the profits will be redeployed by shorting USO using a similar strategy: short
selling at the top of the high volume area two lots of shares and buying to cover one lot at the
bottom of the high-volume area. Although this trade is a slow-moving swing trade used for
disciplined and deliberate trading, it is very low risk with moderate profit and for the most
part is risk-free because the entry points are relatively precise especially if using a shorter
time frame than the 30 minutes here.
