This is almost a holy grail trading system. I have tested this strategy for some time now and I found this strategy can give you at least 80% accuracy. Let me introduce my Crude Oil scalping system with the Parabolic SAR indicator for at least 20 points of profits per day.
What is a Scalping Trading System?
A scalping trading system involves quickly entering trades and quick booking of profits. It’s mainly an intraday trading system where you keep small targets and small stop losses. We have chosen Crude Oil due to its liquidity and daily movement in the commodity market.
Who is a Good Broker for Crude oil Scalping?
You need to choose a suitable broker. As this strategy involves a small target and small stop loss and you need to trade multiple times a day for quick gains the brokerage should be very competitive. I shall suggest you open a trading account with Zerodha as their brokerage is the most competitive. Check this tool: Zerodha Brokerage Calculator.
The Trading Setup with Parabolic SAR Indicator
Open a 5 minutes chart of MCX crude oil and attach the Parabolic SAR indicator OR PSAR (0.02, 0.2).
This will create a crude oil chart with PSAR. This is our basic setup for Crude Oil scalping.
Buy Condition for Crude Oil Scalping
- The Parabolic SAR indicator should be below the price candle.
- Wait for a candle whose open and low are the same. This will be our entry candle.
- Note the high of that entry candle.
- Put a limit buy order in the terminal above the high of the entry candle.
- Once the order is filled keep a stop loss below the low of the entry candle.
- Keep a target the same as stop loss points OR 5 points whichever is greater, i.e. if the stop loss is 3 points keep a target of 5 points but if the stop loss is 8 points then keep a target of 8 points.
- Cancel the order if the entry candle low gets broken before triggering the buy.
Short Sell Condition for Crude Oil Scalping
- The Parabolic SAR indicator should be above the price candle.
- Wait for a candle whose open and high are the same. This will be our entry candle.
- Note the low of that entry candle.
- Put a limit short sell order in the terminal below the low of the entry candle.
- Once the order is filled keep a stop loss above the high of the entry candle.
- Keep a target the same as stop loss points OR 5 points whichever is greater.
- Cancel the order if the entry candle high gets broken before triggering the short-sell.
FAQ
Yes, Crude Oil can be a great market for short-term traders as it moves rapidly in response to supply and demand. Hence, Scalpers could take advantage of these small changes in prices over a short duration making it possible to earn good returns on their trades.
Scalping is an incredibly popular trading strategy used by day traders which involves taking advantage of small price movements. When trading in Crude Oil, Scalpers read the charts looking for opportunities when the asset’s price might increase or decrease within a very short-term frame (usually less than 5 minutes).
Yes, if done correctly, scalping can be extremely profitable due to frequent deals generating constant profits overall. It requires careful attention while monitoring and analyzing different factors that may affect price movements without any significant risks and costs attached which gives scalpers an advantage over other long-term traders who would need more capital investments with higher risk levels associated with each trade.
The best strategy for trading in Crude Oil will depend upon your individual needs. But some common strategies include entering into buy now/sell later contracts at regular intervals, or trading following technical analysis involving studying historical data and trends and then deciding when to enter/exit positions depending upon future market projections, etc. Additionally, you could explore options such as swing or range-type trading too given that they are safer ways to begin profiting out of this volatile commodity space right away!
Conclusion
This strategy works great for Crude Oil scalping and you can get 4-5 trades a day which can fetch you 20-30 points every day. However, we suggest you backtest this strategy rigorously before going live. Lastly, your observations will be welcome in the comment box below.
Sir,
My query is regarding the point no.2 of entry conditions. Is it necessary that the condition 2 should be the same bar while it crosses the PSAR? or suppose the current bar has the different OHLC and it crosses the PSAR and after couple of bars we get the open & Low same, so should we enter when the high of that bar is breached?
thanks
Kaushal, both criteria at same bar does not needed. First criteria the parabolic SAR should be below price bar for a buy and then wait for a open low same bar which will be the trigger bar. Look for the opposite for a sell order.
thank u so much.
Can you help us making an AFL on this?
Ok Kaushal, its not that difficult. You can try yourself too. If I can manage time, definitely I will try to post an afl out of it.
I know the basic coding, and have tried doing it. Problem area is i am not abe to code “the entry bar where the high of the OPEN=LOW candle breached”. There can be n number of bars passed untill it breaks the high point of the open=low candle.
what my coding does is, it sees the previous candle for the open=low condition.
**the example abv was for the buy condition.
thank you.
Kaushal, you can define a buy level and short sell level.
BuyCandle = O=L and C > SAR( 0.02, 0.2 );
BuyLine = ValueWhen (BuyCandle, H);
May be this can help you 🙂
Sorry to bother you again sir
The code which u said, we only get the value of the High, but it dosent say whether the preceding candle have broke the high of the “BuyCandle = O=L and C > SAR( 0.02, 0.2 )”
what we require is Barsince the both conditions have met (and till it is true), it has to find a candle where the high is higher than buycandle condition.
Kaushal, I am unable to understand what exactly are you meaning. But if you get the clear buy and sell levels, you can easily create a trading system. If you wish you can use exrem and barsince functions.
Hi Indrajit
can this coding be used in zerodha Pi
Nope, this was for Amibroker. But this is a simple formula. You can develop it as a Zerodha Pi scanner.
I can make parabolic sar for zerodha or upstox. If you want auto trading system contact me on my email [email protected]
Hi Indrajit need two help
is there any specific candle size or it can be even 2 units candle on a 5 mins chart also can you please help me with the coding or PI for this
Nitesh, candle size is not a factor. The criteria should be open = low OR open = high. The lower the candle size the lower your risk and stop loss. For coding on Pi you can check my post on Zerodha Pi scanner.
hiii sir..best time for this strategy…i mean morning 10-12 very low movement
Best time is when you get a candle with OL or OH same with Parabolic SAR supporting the direction. You need to be patient.
Please can you make a video.?
Aditya, ok fine, we will try 🙂
Hello Indrajit sir
I am Prakash…and your scalping strategy is great according my back test ..it work and I will use this from coming trade …thank you sir
Great Indrajit, I will also back test with few customisations, (hieken Ashi candles and 10 mins time frame ..)
Raees, your inputs will be much accepted 🙂