My response? Just stop.
For me, it's as simple as the supply and demand equation that we learned in high school economics: Demand has been weak because the economies of Europe, China and the rest of the world have been slowing, even as the United States economy has been on firm footing.
There has been too much supply because of the United States shale revolution, as well as countries like Iraq and Libya coming online and increasing production in recent years.
There have been many bounces in oil and oil stocks that could have been traded along the way for the disciplined, stop-loss-using traders. However, for the most part, I have seen traders getting crushed because they are trying to call a bottom in oil and oil stocks since the the price of oil was in the $80's...$70's...$60's...$50's. See the pattern?
For demand to change, the economies of Europe and China would need to grow stronger for a consistent period along with the continued growth in the United States. For supply to change, OPEC would need to cut production and/or the United States or other suppliers would need to scale back production or have a material supply reduction.
Until some of those substantive changes happen, stop trying to be a hero by calling the oil bottom.
Yes there will be bounces to trade in oil and oil stocks, but if a trader tries to create circumstances to justify a trade that are not in line with reality, it can result in losses.
I have been shorting oil futures and at the time of this article I am currently short the February 2015 oil futures at $48.63 (I may cover this short position at anytime).
You can see some of my verified short trades below.