Q9. USO Strategy(Crude Oil)

Oct 04, 2021

This is strictly for Crude oil index USO. Its been backtested since the inception of USO and has got pretty stellar returns with 646% overall returns(Screenshots above). Just rough points to let you know the details

  1. It's a blend of contraction of volatility and momentum which is something new as compared to our other strategies.
  2. We are always on a trade both long and short.
  3. The drawdowns are slightly higher than our typical strategies so be careful with leveraging this. Higher drawdowns in commodities trades are normally expected because of their volatility.
  4. Adding this to your portfolio of stock or index ETF trades can make your portfolio more diversified.
  5. This strategy was outstanding during 2008 Financial crisis and 2020 crash.
  6. The percentage profitable is 43% and our ratio of average win to loss(reward to risk ) is 2.1 as seen below in the screenshot. 
  7. The biggest strength of the strategy is that it picks large moves. its weakness is during choppy conditions, but people who have done this course know how to make money during that conditions as well.