Public trading strategy
US-Iran peace deal floods the market with oil — short the crude rally
Thesis
With the US and Iran moving toward a peace deal, the risk premium that kept oil prices elevated is quickly evaporating. Even though Trump has made threats that caused minor price bumps, the overarching reality is that a major shipping route is reopening and oil supply is recovering. When supply goes up and the fear of war goes down, oil prices generally fall, dragging down oil company stocks with them.
Strategy approach
Construct a mean-reversion trend-following short strategy on USOIL (WTI Crude). Use the Daily timeframe. Enter a short position when the 9-day EMA crosses below the 21-day EMA, confirming downward momentum. Exit the trade if the price closes above the 21-day EMA. Place a hard stop loss 3% above the entry price.