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An Emerging Trading System for Crude Oil Futures

QS I Crude Oil Trading System

QS I Crude Oil is a pattern based trading system released on September 24, 2018. This trading system trades 15 second charts and takes long only trades. It is an emerging trading system since it is based on a new pattern we have seen in this market over the last 12 months. QS (Quick Start), gives us a quick entry using a proprietary pattern. This strategy uses tight stops of 30 points and lets winners run. It is a day trade strategy that gives us the opportunity to capture big moves in a Crude Oil bull market.

This shorter time frame gives us "quicker" signals. As markets mature, we find that some of the trends happen more discretely and we use shorter time frames to detect new trends more efficiently. Before a market moves higher, sometimes it can make an initial move down. This initial move can either be a "flash" move or a more subtle move. This is a strategy for Tradestation, NinjaTrader and MultiCharts.

Improving the Entry with Money Management Algorithms

We use our Money Management Algorithms to improve the entry for this strategy by entering trades on a closed trade bar if we can enter at 15 points better than the original entry price and then we include a 15 point stop loss. The original strategy uses a 30 point stop loss while the Money Money Management Algorithm uses a 15 point stop loss. The stop loss can still be at a slightly different price from the original strategy since the requirement of the closed bar being 15 points or lower than the original entry price can generate trades that are more than 15 points lower than the original entry price. 

The Money Management Algorithm reduces drawdown and risk per trade. The total net profit is lower since there are fewer trades. The average trade profit is about the same. The percentage profitability is very low in a strategy like this as you would expect with an extremely tight stop loss.

NinjaTrader 8 Setup

This strategy works well in NinjaTrader 8 with both the base version and the Money Management Algorithm version.