How to avoid stopp loss...anyone doing that?

simple,...it is priced in usd, the oil,...so that mean if dolar is loosing value,...oil which is priced in dolars should go up,.or vice versa,...so in future if euro will be at 1.55 usd, oil should be at 100+ usd,...

As de123 mentioned, Oil is priced in USD. On the other hand, the strength of a currency is not only dependent on one factor but a myriad of many factors.

You can deduce that:
if dollar becames stronger, oil price could come down.
if dollar becames weaker, oil price could go up.

Cheaper dollar cushions higher oil prices.
Other instances oil price can go up
- Report comes out that we will NEVER be able to create bio-fuel.
- US decides to attack IRAN. or any other country... AGAIN..
- Typhoons.. Earthquakes near oil producing countries. etc..

Ahh, I see it makes sense. Let's just say they they began to price OIL in EUR, would the dollar lose most of its value?

I'll try to make some sense out of all this. What you mean is that since the dollar is depreciating and eroding purchasing power, let's price it in EUR then.

1. Pricing oil in ANY currency such as Euro, Yuan, Sterling, Yen etc (maybe Yen isn't a good example will not solve the problem of declining purchasing power.

IMHO, currencies are always a zero sum game. If one day, (hopefully soon..) the euro starts to depreciate against the dollar, those who have been calling for a switch to euro will then start calling for a switch to dollar or any currency.

Hence, thats why I always say that the lower the dollar, the higher oil prices can go. A cheaper USD, cushions the increase of oil prices. That will not be true if USD is weak against 1 or 2 currencies, but when you see the USD decline against 16 of the major currencies, that tells you something.

2. US remains a large importer of oil. The ramifications of a non-USD pricing of oil could have repercussions on the economy because the movement to a EUR or YUAN currency could raise speculations of a no-confidence in the currency, curtailing economic growth in the US and that would result in lower demand of oil and press down prices for oil. A political and economic risk OPEC members might not take.

Pricing in USD EUR AUD or mickey mouse money ain't going to change anything in my humble opinion. In an efficient market, everything will even itself out. I believe that in the last 30 years, the up and down of the USD has really not been much of an effect to OPEC countries.

IF ANYTHING, OPEC members would do would be to evaluate their respective countries trade policies and to consistent tweak them to their advantage in terms of purchasing power. ie. importing less from countries that currencies have appreciated too much against. using derivatives / future contracts to hedge fx risk.

Cheers!

Hi all,
What affect does rising oil prices have on the major currencies?

BR/

Oil is one of the most traded commodities in the world. Consequently, Its change has a ripple effect on many economies and countries. When discussing oil, most people refer to the Middle East and their vast oil reserves. In fact, it is often forgotten that Canada is one of the world’s biggest exporter of oil and holds the largest oil reserves in the world. Canada’s booming economy has been fueled by the climb in oil which has in turn transferred into the domestic economy. Thus, the Canadian currency has a direct correlation with the price of oil. Likewise, the US currency is said to be inversely correlated with oil prices. With the U.S being one of the biggest oil consumers in the world, a rise in oil prices would weigh heavily on consumer spending. The lower the price of oil, the more beneficial it is for the US economy as discretionary income of US consumers increases. Therefore if oil does crash, this fear of an economic slowdown will be greatly alleviated and be taken as a promising sign by dollar bulls. Traders must also be wondering why the U.S does not benefit from the rise in oil prices, this is because most central banks reserves consist mainly of dollars, in other words they do not need to convert additional dollars to fund new purchases.

In terms of trading, the USD/CAD pair is perfect to trade against rising or falling oil prices. When oil prices rise, the USD/CAD falls. Similarly, when oil prices falls, the USD/CAD falls. As shown below, the graph shows a positive correlation between CAD/USD (Reversed) vs. avg. oil price. The long term economic impact of oil prices on each of the economies is more significant than the short term currency impact. For instance, if oil prices continue to slip, the Bank of Canada would be forced to cut short term interest rates which would greatly lower the CAD. Another benefit from holding the USD/CAD pair is the carry trade benefit. If a trader were to hold 1 lot of the pair, he or she would earn an interest of $2.80 per day. Therefore, the USD/CAD pair rather than oil futures is a more favorable option for trading when using oil as a basis.

The above post by Sumant Yerramilly.

Tx a lot . Very illuminative.

To be more specific:
http://www.bestwaytoinvest.com/Oil-currencies.html

Thanks for the info.

Nice info.
thank you.

Hi, would someone mind posting a 5 minute oil chart for today (not from ODL)? Alternatively can you point me to a good charting package other than MT4?

Thanks

not sure my reply will help, but odl's oil chart corresponds to the futures on brent crude oil traded on the ICE exchange. as far as i know the quotes of odl on oil are the same that on the brent on the ICE exchange. i think that oil charts on odl are reliable.

Hello.

I`ve noticed that there aren't too many discussions about trading crude oil.

I went long at 144.4 on friday and now i`m see it at 142-143 area, problably becouse of the G8 meeting. Funny, but i dont pray it to go above 145 But at least to brought me back on a small profit

Besides that all expect oil rise to 156$/100 euros is anyone else making shot term analysis?

Oil is a dangerous instrument to trade if you don't know what you are doing. Today for example there was a couple of occasions where oil dropped by $1 in the space of a minute or two. If you are trading oil on a short term strategy I would suggest you employ a robust risk management strategy otherwise you could get yourself in big trouble. Maybe using options could be an idea to limit risk.

Some other considerations when trading oil futures is to consider the correlation with oil stocks. Those who are looking for crude oil to fall in price would be taking note of the fact that oil stocks have not risen as sharply as crude oil which could be interpreted as an indication that the recent rally in oil is due to speculation rather than fundamentals. I am not offering an opinion on where price will go but rather it is worth looking at a number of possible factors that maybe affecting price.

Another way to trade oil would be to trade calendar spreads which at its basic level examines the supply and demand of 2 different contract dates. Some prefer to trade calendar spreads and see it is as less risky than trading outrights although others may differ in opinion on this. If you have never looked at calendar spreads before this may be worth investigating.

If you are trading oil from a trend following perspective then this year should have been a good year. Long commodity funds have been enjoying good success this year so far.

My advice is would be with any instrument that you choose to trade to examine all the different angles.

Good luck.

does anyone know of any strategies for oil? I've been looking arnd but haven't found any groups discussing this.
perhaps this is mainly a forex group and not for oil but i suppose someone might know where to drive to get learn more abt oil trading methods/strategies...

any help wud be excellent

regards,
Pret

Research topics:

-Oil ARB trading
-Convergence trading when executing paired WTI-Brent trades
-Crack Spreads.

Other than that, the market is fairly predictable on the tick charts. Support and resistance at a micro scale seem to be honoured so scalping various thresholds is profitable. When oil breaks a threshold it puts the hammer down, so you often see moves in the order of 30-60 pips.

I'm not game to sleeep on oil trades unhedged though. The swings would kill my account while I slept(if I could!).

Oh, a last word of advice. Don't trade the emotion right now. Last night I watched the long positions in the market get eroded by around $6. I was hedged so didn't really care if the price went up or down.

If you plan on getting rich as oil moves towards 150 ask yourself if your leveraged position can tolerate the swings between now without tanking your account. If you want to get in to oil, I'd advise getting a little scaling experience with small numbers and use scalping to get good entries when oil posts fresh lows or starts going sideways (over the next few days).

Then you can use the scalped entry, set a stop above B\E and sit back with your fingers crossed. Just try to make sure your stop is not too close to B\E. With 100pip drops I doubt the broker would honour your number. You will likely exit on the bottom of the move.

Wed morning 10:30 ET oil inventory report - it will rock your boat just like NFP on fx.

I am new to forex. Don't do Nynex. But as a Canadian I have noticed over the years that our dollar seems to go up/down in lockstep with the price of Gas.

So I looked up Crude oil futures on nynex and superimposed over forex usd/can and sure enough they are mirror images of each other.

Anyone think this strategy has merit. Because Forex is 24hour but Nynex is not I would think there could be some angle here.