Commodity crude oil trading has the potential to fill your lap with big bucks, no matter what kind of market situation it is. This is because its value has been well acknowledged in almost all the economies of the world. In spite of immense fluctuations, the prices have succeeded in helping the traders to remain unaffected and to attain a strong foothold, especially when it is a matter of garnering profits.
Those who dive into crude oil trading, are sometimes unaware of the hidden intricacies that mark the very feature of the crude oil market. Due to this reason, they are unable to bask in the easy-to-have profits. And this brings in the importance of effective strategies.
One has to have an eye for the future or consideration towards ETN or ETF if one wants to succeed in the market. In addition to this, one has to beware of the relationship between demand and supply of commodity crude oil. If the supply descends, prices will rise; and if the supply ascends, a fall will be witnessed in the prices. Keeping this theory in mind, market strategies have to be framed.
If you want profit to flow in your way, then you must be persistent with the following five crude oil trading tips, that have the power to make you hit in the market:
1. Notice What Transition Supply and Demand Bring:
Supply when squeezed and demand when widened, bring an upward movement in prices and vice versa. Supply and demand, being the prominent players resulted in the sky-high-price-rise-witness that amounted to 145.81 dollars over each barrel in the year 2008. Similarly, downfall also couldn’t escape our eyes, when the crude oil price descended to an amount of 37.75 dollars per barrel, mainly in the year 2015. The year 2020 added to the years that faced a severe fall in the prices, due to the great economic depression.
2. Have an Overview of the Market:
Those who treat crude oil trading as a serious profession, do take the assistance of futures, as they need to save maximum money and make maximum profits. Retail traders, however, do not take much interest in crude oil, as they prefer the trading of valuable metals.
3. Make Either Brent or WTI Crude Oil Your Pick:
There are two most illustrious markets around which crude oil trading revolves. One is the US-based West Texas Intermediate and the other one is referred to as Brent, which has its roots in North Atlantic. Over the years, it is Brent, which has succeeded in conveying global pricing of crude oil. However, WTI was much in vogue in crude oil trading in the year 2017.
4. Consider Long Term Fluctuations:
Following the Second World War, commodity crude oil witnessed a stable rise till the year 1970. However, in the year 1980, the prices went up to around 120 dollars and then there happened a greatest fall till the year 1999, after which prices soared to an exorbitant amount of 157.73 dollars in the year 2008. After that, gradual stability has been seen in the prices until the devastating year 2020, when the prices touched the ground.
5. Choose Where You Want to Land:
You can choose to trade with NYMEX WTI’s futures, that are popular for their liquidity or else you can select U S Oil Funds that dole out equities for you to give a shot. You would be stunned to know about the density of these equities, which reaches an average of more than 20 million shares, and that too, every day. Other than this, you can seek the aid of oil companies that are usually quite abreast of most of the opportunities that have crowded the markets. The trends predicted by these companies also have their long-term applicability attached to them. Moreover, these trends are also affected by the oscillation in the equity markets.
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