Trading Strategy Plan: WTI Crude Oil

Objective: To capitalize on short to medium$-$term trends in the crude oil market by leveraging

momentum indicators to identify potential buy and sell signals for WTI crude oil futures contracts.

Instruments: This strategy will be applied to WTI crude oil futures contracts $($CL$)$ traded on the New York Mercantile Exchange $($NYMEX$).$

Time Frame: The strategy will analyze $4-$hour and daily charts for signals, aiming for holding periods ranging from a few days to several weeks.

Indicators: Relative Strength Index $($RSI$)$ with a period of $14$ days

Entry Criteria:

Buy Signal: A buy signal is generated when the RSI moves above $30($indicating potential

oversold conditions$)$

Sell Signal: A sell signal is initiated when the RSI moves below $70($indicating potential

overbought conditions$)$

Exit Criteria:

Profit Target: Set a profit target at a $3$:$1$ risk$-$reward ratio from the entry price.

Stop$-$Loss: Place a stop$-$loss order at a level representing a $1\%$ loss of the total trading

capital to limit potential losses.

Risk Management:

Allocate a maximum of $5\%$ of the total trading capital to any single trade to manage risk

effectively.

Adjust the position size to ensure the stop$-$loss does not exceed the $5\%$ risk threshold.

Trade Management:

Reassess open positions daily, adjusting order to maintain risk management plan

Review and Adjustment:

Perform a weekly review of all trades to evaluate the strategy$$s effectiveness, focusing on win

rate, average profit versus average loss, and overall profitability.

Adjust the strategy parameters based on review findings.

Documentation:

Maintain a trading journal, documenting the rationale, entry and exit points, trade duration,

and outcome.

$*$Provide a CME GROUP WTI Crude Oil Plan Strategy Plan like the example above.