OIL TRADING GUIDE
Oil trading is very common as this is the most popular commodity in the world. The Oil commodity is so important that it can start and finish wars. It is such a valued commodities that there were actual wars throughout history about land generating barrels of Oil. If you wish to have a pleasant experience trading it with your Forex broker, then read the following useful tips on this financial trading product.
CRUDE OIL VOLATILITY
The Oil, either called Crude or SP, Nymex or any other name given to the product by your Foreign exchange broker is one of the most liquid and fast-moving products available. The Oil or petrol can range between 1 to 2 US dollars per day to even several tens of dollars. So hold on tight to your chair while trading this highly volatile commodity.
There are several key factors that affect Oil trading. Here are some of the main ones:
1. World Global weather is a very strong market mover for the petrol. A Tsunami or a typhoon can affect the prices or when any natural disaster occurs. Be sure you do not place too much risk on your account as these kind of changes are unpredictable.
2. Continuing from point 1 above, such natural global weather forecasts will affect Oil trading by changing supply and demand. These changes cause high volatility and beside the obvious risks, create great trading opportunities.
3. Political decisions. when a country decides to keep several millions of Oil barrels at in inventory, change the tax levels on this product or any other political driven changes, the Oil, gas or petrol will always have a great impact. You should remember – More supply on the open market means lower prices for the commodity.
HOW TO TRADE OIL?
There are so many trading strategies and methods for Oil trading. I’m not going to cover specifics on this short article. However, i do you want you to always apply the following basic elements:
- Use lower margin than currencies.
- Stop losses and take profits must be placed.
- Keep a constant monitoring for your positions.
- Choose your forex broker carefully in terms of spreads provided.
Oil trading is not only volatile and risky. The Oil commodity product can be very rewarding. So take the time to educate yourself and pay attention to the potential risks. If you do so you can generate huge income only by trading this one commodity.