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Thread: Three Tips for Trading Crude Oil

  1. #1

    Three Tips for Trading Crude Oil

    Trading in commodities is one of the greatest ways to profit from the ups and downs of their market prices. The most common commodities traded in the market include metals and crude oil. Of these, crude oil is the most preferred one because it is extremely liquid and a trader would be able to profit from it in nearly all market conditions (because of its huge importance to almost all the countries and political systems). Below is a list of things which you need to know in order to trade oil:

    1. Learn What Moves Crude Oil
    The prices of crude oil are hugely swayed by popular perceptions of demand and supply. The output of oil worldwide plays a crucial role in determining its prices, as well as prosperity worldwide. An excess of supply and contraction of demand helps the traders to sell oil on lower grounds, while the reverse situation helps them elevate the grounds.
    If two very powerful trends converge together, they would be able to produce uptrends.

    2. It is Very Important to Understand the Crowd
    Hedgers and traders who are professionals have a presence in the energy markets. Players in the industry adopt positions so that they can offset physical exposure. Hedge funds, on the other hand, speculate on short and long term direction. Investors and retail traders don’t boast much influence in the oil market. When crude oil prices see a sharp rise, it affects retail sharply, thereby attracting small traders to invest money. The alternating waves of fear and greed would make the underlying trend much greater.

    3. You Should Choose between Brent and Crude Oil
    There are two markets through which crude is known to trade; Western Intermediate and Brent. WTI originates in the U.S. Permian Basin, while Brent originates in the North Atlantic. These types contain varied content of sulphur and also different gravity. Commonly, lower WTI levels are called ‘light sweet crude oil’. In recent years, Brent has been upgraded to being a better indicator although WTI is now more heavily traded in the world futures markets.

    There are a lot of things that one would need to bear in mind while deciding to trade crude oil; the aforementioned points are only a few of them. However, as said right at the outset, oil is a commodity which stays more or less stable throughout the world at a given point of time, so it should be worth a try to seek your fortune in crude oil CFD trading.

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  2. #2
    Senior Member
    Join Date
    Oct 2017
    Well I have read that there are cars which does not need gas or oil to run. If those have started to get heavily used then there will be less demand for oil. Hence price will fall from what it is right now.

  3. #3
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  4. #4
    Those are very good for trading crude oil; CFDs offer a great range of instruments to trade and oil is one of them.

  5. #5
    Senior Member
    Join Date
    Feb 2022
    I have never been very good at trading crude oil, so these tips are pretty useful for me, thank you for sharing them!
    Also, something I realized at some point - oil is tied closely to CAD, so follow USD/CAD closely too.

  6. #6
    Junior Member
    Join Date
    May 2022
    one thing is buy oil when it cost 50$ sell on 100$, i use this strategy

  7. #7
    Senior Member FXOpentrading's Avatar
    Join Date
    Dec 2021
    Oil prices are still under bearish pressure at the beginning of 2024, watch the price US Crude oil chart on Ticktrader FXOpen, oil prices are now falling again at level 70.45. It seems that the escalation of the Hamas vs Israel war is causing market concerns and reducing demand. Despite OPEC+ seeking to cut production in hopes of higher oil prices
    I trade at FXOpen

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