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The Weekend Oil strategy is designed to trade the US WTI crude oil. This trading strategy was designed by Mike Rückert. In 2018, Traders’ Magazine published an article describing the Weekend Oil strategy.
These are advantages of the Weekend Oil strategy:
|Suitable for||: US WTI crude oil|
|Instruments||: Futures and CFD|
|Trading type||: Daytrading|
|Trading tempo||: 1 signal on Friday|
|Using NanoTrader||: Manual or (semi-)automated|
Investing and trading based on seasonal effects (harvest cycles, weather cycles…) and market effects (weekend gold, end of month cycles…) is done by many professional investors since a very long time. Some of these effects occur intraday. The Weekend Oil strategy tries to benefit from such an intraday effect.
Contrary to many seasonal and market effects, which are analysed in a plethora of academic papers, not a lot of information is provided on why this intraday effect on the US WTI crude oil occurs. Nevertheless, the back-test appears very impressive.
This illustration shows back-tested results (10 years) for the Weekend Oil strategy as available in the platform and described by the author in Traders’ Magazine.
This illustration also shows back-tested results (10 years) but with a few modifications by WH SelfInvest. The objective of these modifications is to reduce the long sideways period, which is visible in the back-test above.
A position is bought at the market price on Friday afternoon, a few hours after the US market opens. The buy is only executed if a pre-condition is met: the close price of the previous day was above the 5-day moving average price.
Typical for strategies based on market effects, the Weekend Oil strategy uses a time stop. The position is closed the same Friday, after three hours. The strategy also uses a stop loss and a profit target. The price levels of these two orders are, however, far away from the market. Therefore, they are rarely executed. The position is nearly always closed by the time stop.
This example shows a typical Weekend Oil trade. Given that the position is actually opened and closed before the weekend, the strategy’s name is somewhat of a misnomer.
Using the NanoTrader follow these steps: