Oil Breaking Through 2018 Resistance?!

The last time Oil was in my portfolio was when I shorted it when price fell from $100 to $30 back in 2014 to 2016.  Since then, I have stood aside with price whipsawing within a range. 

I prefer not to get caught up with the name of an asset. Gold, Oil, the EURUSD and Tesla TSLA are examples of asset names that people build unhealthy attachments to which leads to losses and disappointment. 

Instead, I have a scanning, analysis and checklist system that filters out the very best high-probability assets regardless of name. 

The goal as an investor is not to be right but to make profit, a concept that people often overlook resulting in a poorly performing or underperforming portfolio. 

With the climb in price since last year on Oil and with price now looking to break through key resistance, highlighted by my bespoke tool on the monthly timeframe below, Oil is starting to meet my criteria. 

It is still very much early days and I am not quite ready to take a position. This is to avoid the potential of a fake breakout and to minimise losses on my account. 

Patience is very much a virtue. 

Once price has confirmed a bull trend continuation above the 2018 resistance as support, I will then take a small position. My risk is typically no more than 0.5% to 2%.  If price continues in my favour, I will then strategically buy more Black Gold. This is known as compounding and how I keep my losses small and insignificant and the upside exponentially higher. I then follow price with a well-placed trailing stoploss which removes all the guesswork out of exiting.  This is how you build a portfolio slowly and safely over time but be rewarded with the power of compound growth.  As the saying goes, cut your losers short and let your winners run. 

I will be applying patience for now until oil meets my checklist. 

Zaheer Anwari - Co-founder of Sublime Trading