WTI Intraday Pressure (CL1!-CL2!)WTI INTRADAY FACTOR PRO (CL1/CL2)
User Manual
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OVERVIEW
This indicator uses the relationship between CL1 (front-month WTI futures)
and CL2 (second-month futures) to estimate intraday market pressure.
It helps identify:
* directional bias
* continuation vs mean reversion conditions
* higher-quality breakout environments
Important:
This is a filter , not a standalone trading system.
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CORE IDEA
The indicator is based on the spread:
S = CL2 - CL1
Interpretation:
* Backwardation (CL1 > CL2) → bullish pressure
* Contango (CL1 < CL2) → bearish pressure
However, the level alone is not enough.
The indicator focuses on:
* normalized spread (z-score)
* change in spread (most important)
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HOW THE FACTOR IS BUILT
The final factor combines:
* Spread (normalized)
* Change in spread (normalized)
Formula:
F = w1 * Z_spread + w2 * Z_delta
Default:
* w1 = 0.3
* w2 = 0.7
The change component drives most of the signal.
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ADDITIONAL FILTERS
The indicator includes several filters to improve accuracy.
Volatility scaling
* increases signal importance during active periods
* reduces noise in quiet markets
CL1 dominance filter
* requires front-month to lead the move
* removes weak or artificial spread changes
Persistence filter
* requires signal to hold for multiple bars
* avoids one-bar spikes
Momentum filter
* aligns trades with short-term direction
Session filter
* focuses on high liquidity hours (US session)
Adaptive thresholds
* adjusts sensitivity automatically based on market conditions
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SETTINGS EXPLANATION
Z-score lookback
Default: 300
* lower = faster but noisier
* higher = smoother but slower
EMA smoothing
Default: 10
* controls signal stability
Weights (w1, w2)
* increase w2 → more reactive intraday signal
* increase w1 → more structural bias
Filters
Each filter can be turned ON/OFF for testing.
Recommended:
keep all filters ON.
Thresholds
Default:
* Long: +1
* Short: -1
Used only if adaptive thresholds are disabled.
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HOW TO READ THE INDICATOR
Factor values
* F > +1 → bullish bias
* F < -1 → bearish bias
* |F| < 0.5 → neutral (no edge)
Background color
* Green → long bias
* Red → short bias
Signals
Triangles mark the start of a new bias.
They are not entry signals.
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HOW TO USE IT
Main rule
Use the indicator to decide:
"Should I trust this move?"
Do not trade signals blindly.
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Long setup
* Factor positive
* Price above VWAP
* Breakout or higher high
Enter on strength.
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Short setup
* Factor negative
* Price below VWAP
* Breakdown or failed bounce
Enter on weakness.
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Avoid
* trading in neutral zone
* counter-trend trades
* low liquidity periods
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USE CASES
Intraday trend trading
* primary use
* improves breakout quality
Scalping
* works with tighter settings
* requires confirmation
Mean reversion
* when factor is near zero
* market is balanced
News events
* useful after the move
* unreliable during releases
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OPTIMIZATION
If too many signals:
* increase smoothing
* increase thresholds
If too few signals:
* decrease thresholds
* reduce lookback
If signals are late:
* reduce smoothing
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LIMITATIONS
* not predictive alone
* depends on futures data quality
* weaker outside US session
* can fail during major news
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FINAL NOTES
This indicator reflects underlying futures positioning.
It will:
* reduce bad trades
* improve alignment with market pressure
It will NOT:
* generate signals by itself
* guarantee profitability
Focus on:
better trade selection, not more trades
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