#Gate广场五月交易分享

# Oil Price Roller Coaster
Is the crude oil market playing you dizzy? Don’t worry! Fluctuating within the range with high sell and low buy is the key
These days, those trading crude oil must be feeling overwhelmed. On May 7th, influenced by optimistic expectations that the US and Iran were close to reaching a ceasefire memorandum, oil prices plummeted over 7% in a single day, with WTI briefly dropping below $90 per barrel. However, in the early hours of May 8th, the US military conducted airstrikes on Iran, and geopolitical risk premiums quickly returned, causing short-term rebounds above $95 per barrel. Many traders got caught in a double squeeze. In this situation, Little God of Wealth suggests everyone stay calm, as “news is often coordinated with market trends,” and avoid chasing news-driven trades. Under the current stalemate in the US-Iran conflict, crude oil is likely to fluctuate widely around the $90-$100 range. Be prepared to sell high and buy low, and profits will follow.
This wide-range fluctuation pattern stems from the tug-of-war between fundamentals—supply and demand—and geopolitical factors: on one side, global crude oil inventories are at an eight-year low (EIA data shows inventories continue to decline), supporting the oil price bottom; on the other side, uncertainties in the US-Iran conflict, such as the risk of Strait of Hormuz shipping disruptions, continually push up the premium ceiling, forming a clear $90-$100 fluctuation zone.
Core Principles of the High Sell and Low Buy Strategy
Within the $90-$100 fluctuation zone, high sell and low buy is the most efficient way to trade crude oil. Its core logic is:
Support at low levels (around $90): When prices fall to about $90, fundamental factors (such as low inventories and OPEC+ production cuts) provide strong support. This is the time to buy long positions, with lower risk, because even if geopolitical tensions ease, supply tightness will limit downside.
Resistance at high levels (around $100): When prices approach $100, geopolitical risk premiums face downward pressure (such as ceasefire negotiations restarting), coupled with high oil prices suppressing demand (e.g., reduced aviation fuel consumption), creating natural resistance. At this point, selling or shorting can lock in profits.
Range stability: The current fluctuation zone is defined by a balance between geopolitical events and fundamentals. The “stalemate” mode of the US-Iran conflict (such as alternating ceasefire expectations and military actions) ensures the range remains intact in the short term, providing operational windows for the strategy.
Execution and Risk Management
Implementing the high sell and low buy strategy requires following these steps:
Entry timing: Monitor real-time data and news (such as US-Iran negotiations, EIA inventory reports). When prices hit around $90 (±$1), gradually build long positions; when approaching $100 (±$1), gradually reduce or switch to short.
Position control: It’s recommended that single-trade positions do not exceed 10% of total capital to diversify risk. Use technical indicators (like RSI oversold/overbought signals) to confirm entry points.
Stop-loss and take-profit settings: Set stop-loss for longs below $88 (to prevent breakdown risk), with take-profit targets at $98-$99; for shorts, set stop-loss above $101, with take-profit at $92-$93.
Dynamic adjustments: If geopolitical events escalate (such as strait blockades), the range may shift upward to $95-$105; if a ceasefire agreement is reached, the range may shift downward to $85-$95. Flexibility in strategy adjustments is necessary.
Potential Risks and Responses
Although the fluctuation zone offers profit opportunities, be alert to black swan events:
Upside risk: Out-of-control US-Iran conflict causing supply disruptions, breaking through $100. The strategy should promptly cut losses and switch to trend-following.
Downside risk: Signs of global recession (such as Fed rate hikes) weakening demand, causing prices to fall below $90. Reduce positions and observe.
Macroeconomic influences: Keep an eye on the US dollar index (a strong dollar suppresses oil prices), non-farm payroll data, etc., as these can indirectly impact the oil market through liquidity changes. It’s recommended to incorporate macroeconomic calendar data to optimize trading timing.