Oil trading: practical tips to increase profits

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Are you wondering how you can increase your oil trading profits? If so, here are some practical tips to help you increase your profits

As the primary energy source for the global economy, crude oil is a tremendously sought-after commodity. It’s a natural fossil fuel that you can convert into various goods, including wax, lubricants, diesel, gasoline, and other petrochemicals. It is highly liquid, in high demand and traded in large volumes. Consequently, oil trading requires small spreads, distinct chart patterns and significant volatility. For more details you can refer to the Granimator platform.

The global benchmark for oil is Brent crude, which makes up over two-thirds of all negotiated oil contracts. The standard oil in America is WTI, which is a little lighter and sweeter than Brent. This article aims to disseminate oil trading tips and tricks maximize profits.

Oil trading: practical tips to increase profits

Stick to a plan in oil trading

Experienced oil traders typically stick to a plan. They know the essential variables who influence oil prices and employ a trading strategy that fits their intuition as a trader. Each trading strategy is unique and the risk management it is crucial for a fruitful trading, along with an appropriate use of financial leverage and the prevention of common trading mistakes.

Once traders know the primary supply and demand variables that affect oil prices, they can make use of technical analysis to look for opportunities market entry. The trader can then use the appropriate risk management strategies after using technical analysis to identify a buy or sell signal. Let’s try to give an example.

A drop in supply was the result of an oil production cut by OPEC and Russia on November 30, 2017. To understand when to buy or sell in the market, a trader should incorporate these notions into their plan.

Pattern Trader offers traders a piattaforma user-friendly to conduct all their operations. A trader can look for cues to enter the market using a variety of technical indicators and price patterns. The use of numerous technical indicators is unnecessary; one you are familiar with will be fine.

For example it may try to set a take-profit at the most recent high and a stop-loss at the most recent low to control risk.

Oil trading: practical tips to increase profits

Anticipate future trends

When making a trade, experienced traders may also attempt to make predictions. Traders can examine the futures curve to predict demand, the CFTC speculative positioning to understand the nature of the current market and options to profit from early moves with high volatility or to protect available holdings.

Speculative position/CFTC

The report of the Commodity Future Trading Commission (CFTC) is crucial when trading crude oil futures. It provides traders with insight into market dynamics, making it a valuable tool for predicting the direction of oil prices. Generally, changes in the CFTC’s net assets under management come before changes in oil prices.

Using futures and options for trading

A trader must use the appropriate exchange when buying futures and options for the oil benchmark he wishes to trade. Since most platforms require permissions to buy and sell, experts do most of the futures speculation rather than ordinary people.

Oil trading: practical tips to increase profits

Invest in oil trading

An investor can gain exposure to oil through shares of oil companies or through exchange-traded funds based on energy rather than trading on the single market (ETF). The price of oil, which occasionally provides superior value, significantly affects the costs of oil companies and ETFs.

Using Social Media

Social media has become a platform more and more useful for exchanging ideas, spreading knowledge and getting the latest news. And that’s true of oil traders who tweet using the hashtag #OOTT, which stands for Oil Traders Organization. Traders and industry professionals present the latest oil market news and essential reports on social media.

Following these tips can help you venture into oil trading quickly. However, do ongoing research to stay abreast of developments in the oil industry. That’s all from the web and social section, keep following us!