Intraday traders of Crude Oil Futures ($CL_F) may at times feel as if they are braving the wild, untamed landscape of our Denver, Colorado home as it was centuries ago. Taking into account the uncertainties of this highly volatile market, traders can benefit from the free tools offered within NinjaTrader to help them make their trading decisions. Reports of oil shortages across the nation have been painted across newspapers, websites and television sets for the past week, which may provide traders with some new opportunities in this market. A couple of the tools used in this Daily Crude Oil ($CL_F) chart are the Simple Moving Averages (SMA’s) in combination to identify crossover patterns as well as confluence in heavily trending markets. Applied are the popular 21 day (in green) and 50 day (in yellow) SMA’s. We can see in this chart that there are a few crossovers as well as areas of strong trend indicated by the SMA’s. Another tool that many investors use in identifying trend and reversal is the Relative Strength Index (RSI) which is displayed on the bottom panel of this chart. The RSI compares the magnitude of an instrument’s recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. The 9 day RSI line is plotted in green with a 9 period average in yellow. The horizontal lines that plot with this indicator are customizable and I have set to values of 20 and 80. Traders may utilize this visual representation of market strength to confirm their plans for strategy entry/exit points and key areas of market turning points. Using these tools, traders can eliminate some of that “wild west” uncertainty in Crude Oil Futures ($CL_F) and make more educated trading moves. This chart was made possible with free tools offered through the NinjaTrader 7 platform using free end of day data from Kinetick.
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