How to Trade a CLS Model 1 Setup on USOIL

A Repeatable Process for Trading Structure

Many aspiring traders look for a magic indicator, but sustained success comes from a repeatable process. A recent USOIL analysis by our forex mentor, David Perk, perfectly illustrates the step-by-step methodology behind trading the CLS strategy. Specifically, he outlined a bearish Model 1 setup.

This article will turn that analysis into a practical, step-by-step guide you can use to identify and trade similar structures. Mastering such a process is a key objective for any trader, especially an aspiring funded trader looking to prove their consistency.

Step 1: Identify the Consolidation (The CLS Range)

Your first job is to be an observer, not a participant. Look for a clear period of consolidation on your chart. In David's example, this was on the 2-hour USOIL chart.

• What to look for: A defined period where price is trading sideways, creating relatively clear upper and lower boundaries. This is your "CLS Range."
• Action: Mark out the high and low of this range. This area is now your primary point of focus. Do not trade while price is chopping around inside it.

Step 2: Wait Patiently for Manipulation

Once the range is defined, the waiting game begins. The core of the CLS Model 1 setup is waiting for the market to hunt liquidity outside the range. For a bearish setup, this typically means a push above the range high.

• What to look for: A decisive move that breaks a key level, as noted in David's idea. This move is designed to look like a bullish breakout, trapping eager buyers and triggering stops.
• Action: Do nothing. Your job is to let the market execute this liquidity grab without getting involved. Resisting the Fear of Missing Out (FOMO) is a professional skill.

Step 3: Spot the Confirmation (The CIOD)

After the manipulation, you need a clear signal that sellers have taken control. This is the "Change in Order Flow" or CIOD.

• What to look for: A strong rejection of the higher prices. This can manifest as a powerful bearish candle that closes back within the previous range, or a clear break of short-term bullish structure on a lower timeframe.
• Action: Wait for a candle to close. As David explicitly states, "Enter only after candle close." This is your confirmation that the rejection is valid and not just a temporary wick.

Step 4: Execute and Manage the Trade

With your confirmation in hand, you can now move to execution with a clear plan.

• Entry: Execute a short (sell) order after the confirming candle has closed.
• Stop Loss: Place your stop loss logically above the high of the manipulation move. This defines your risk and protects your capital if the analysis is wrong.
• Take Profit: Set your target at the 50% level of the initial CLS Range you identified in Step 1. This is an objective, pre-defined target that helps you secure profits systematically.

By following these steps, you replace emotional, reactive trading with a calm, methodical process. This is the kind of structured approach taught in our comprehensive trading course, designed to build disciplined and consistently profitable traders.

Learn this with live trading signals

This is the same process David uses when he publishes trading signals inside the CLS Lab membership. Join the trading community, follow the live signals, and sit in the streams — your first 5 days are free.

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