MT4 Template Oil Trading System

A Oil Trading System refers to a set of oil rules that you follow to manage your crude oil trades. These written oil rules will determine when you open a oil trade and when you'll exit. A oil trade system is created by combining two or more oil technical indicators.

For example, the Stochastic Oscillator indicator can be combined with other oil indicators to form a oil system. For this example - stochastic oscillator can be combined with the oil technical indicators below to come up with the following crude oil trading system.

• RSI indicator
• MACD indicator
• Moving Averages indicators

Examples – MT4 Template Oil Trading System Example

Creating a Oil System - Oil System Template Examples

So the question is how can a oil trader come up with oil trading systems that work like the oil system example above and how does one write it's oil rules? to write the oil system rules follow the steps below.

Seven steps to creating an indicator based oil trading system

To come up with these set of oil rules we use the following seven steps.

1. Choose your Crude Oil Chart Time-frame

This first step depends on how many hours you want to dedicate to crude oil. Whether you prefer sitting in front of the computer constantly for several hours analyzing short oil chart time frames OR you prefer setting up your oil charts using bigger oil chart time frames once or twice a day. Choosing a oil chart time frame will mainly depend on what type of oil trader you are.

Crude Oil Trading Chart Time Frames in MetaTrader 4 Oil Software

While testing your new oil trading system you may want to find out about its performance on different oil chart time frames and then choose the most accurate and profitable oil chart time frame for you.

2. Choose indicators to identify a new oil trend

The goal of a oil trader is to get into the trade as early as possible and take maximum advantage of crude crude oil price moves.

One of the common ways to spot a new oil trend as fast as possible is to use Moving Averages Crude Oil Indicator. A simple oil strategy is to use a moving average crossover system that will identify a new trading opportunity at its earliest stage.

Moving Average Crossover Technique

Sell oil signal and Buy oil signal Generated by Moving Average Crossover Oil Trading Method

3. Choose additional oil indicators to confirm the oil trend

Once we find a new oil trend we need to use additional indicators that will confirm the entry oil signals & give either a green light for action or save a oil trader from fake-outs.

To confirm the oil signals we use RSI indicator and Stochastic Oscillator indicator.

RSI Crude Oil Technical Indicator and Stochastic Oscillator Oil Trading Indicator System

4. Finding oil entry and oil exit points

Once oil technical indicators are chosen so that one oil indicator gives the signal & another indicator confirms the signal, it's time to enter a crude oil trade transaction.

A Oil trader should enter a oil trade as soon as a oil signal is generated & confirmed after a candlestick closes.

Aggressive oil traders enter a oil transaction immediately without waiting for the current crude crude oil price bar to close.

Other oil traders wait until the current crude crude oil price bar is closed and then enter the oil trade transaction if the trade setup has not changed and the oil signal remains valid. This method is more considerate and prevents additional false entries and oil whipsaws.

Generating Oil Signals – how to Generate Oil Trading Signals.

Generating Oil Trade Signals

For exits, a oil trader can either set an amount he wants to earn per trade or use technical oil tools that help to set profit goals like Fibonacci expansion tool or set a protective stop loss depending on the oil market volatility at any given time. Alternatively a oil trade can exit when the oil indicators give an opposite trading signal.

When opening a new oil trade transaction it is always important to calculate in advance how much you are willing to lose if the oil trade transaction goes against you. Although the goal is to create the best oil trading system in the world, losses are inevitable & therefore being ready to tell where you will give up & cut your losses before starting a oil trade transaction is very important.

5. Calculate risks in each Oil trade setup

In Oil, you must calculate your risk for each oil trade. Serious oil traders will only enter and look to open an order if the risk to reward ratio is 2:1 or more.

If you use a high risk to reward ratio like 2:1, you significantly increase your chances of becoming profitable in the long run.

The Risk-Reward Chart below shows you how:

Crude Oil Money Management Reward Risk Chart – Example Template Oil Trading System

In the first example of Risk-:-Reward Ratio, you can see that even if your oil system only won 50% of your oil trades, you would still make a profit of $10,000. Read more on this oil money management oil topic: Here Crude Oil Trading Money Management Guidelines - MT4 Template Oil Trading System and Crude Oil Money Management Techniques - Template Oil Trading System Example.

Before opening a new oil trade, a oil trader should define the point at which they will close the oil trade if it turns to be a losing oil trade. Some traders use Fibonacci retracement levels tool and support and resistance levels. Other oil traders just use a pre-determined stop loss to set stop loss oil orders once they have opened a oil trade transaction.

6. Write down the oil systems oil rules and follow them

A Oil Trade System refers to a set of rules that you follow to manage your crude oil trades.

The keyword is ASET OF TRADING RULES which you must follow. If you don't follow the oil rules then you don't even have a oil system in the first place.

The next oil systems guide shows you an example of how to use above steps to come up with your own Oil Trading online oil system:

Next Guide: Examples of Writing Oil Trade Systems Rules

7. Practice on a Demo Account

Without enough trades, you will not be able to realize the true profitability of your crude oil trading system.

Once you have your oil trading system rules written, it is time to test & improve your oil trade system by using it on a demo practice account.

Open a free demo trading account & trade your oil system to see how well it will respond.

It is strongly recommended to begin with a demo oil account & practice for at least for 1 or 2 months so as to gain some practice & experience how the oil market works.

Once you start making some decent profit on your demo oil account you can then try opening a live crude oil account & start trading with real money.