Crude oil futures appear to be one of the most popular commodities that are traded very actively. High trade volumes ensure greater liquidity that is perfect for intraday traders. If you are new to the instrument and do not know what to start with, we have prepared some useful tips that will help you implement a simple crude oil intraday trading strategy and start making a profit.
The idea behind the asset is very simple. We have some major oil producers on the one side. They look for maximum exposure. This is why companies use oil future contracts to hedge that exposure. On the other side, we have intraday traders seeking bigger market swings and a chance to make a profit using speculative techniques.
It all sounds pretty simple. However, the oil market has grown extremely overcrowded over the last few years. The only way to perform at a high level and make a good profit is to work out an effective crude oil intraday strategy.
Key Takeaways When Using Crude Oil Intraday Strategy
Before we start discussing oil trading tips and strategy insights, we need to consider several core aspects. Make sure you clearly understand each of them before you enter the market with real funds. A good idea is to use a Demo account and try some of the oil trading tactics without the risk of losing real money. So, the main points to remember are the following:
- Crude oil comes with probably the highest liquidity level. What’s more, it is the only energy source used in various sectors.
- The understanding of such fluctuation processes and the way they may affect the oil price in terms of supply and demand will ensure successful trading.
- To trade crude oil, you will need to implement various tools that include both fundamentals and technical analysis.
- A successful crude oil intraday strategy is not possible without proper risk management.
With these aspects in mind, you may try to make your first steps when trading oil.
How to Start Trading Oil
Trading oil has one crucial advantage for beginners. It does not require huge investments right from the start. With the minimum deposit, you will still have endless opportunities to bear fruit mainly thanks to higher leverage. The only thing you need to keep in mind that crude oil is not only about liquidity. It also comes with extreme volatility, which makes it hard to foresee the market and price moves. This is where technical analysis, news and analytics may come in handy.
In addition, you will need several crucial technical indicators. While MTrading offers commodity-brokering services, you will also be able to pick up needed skills and knowledge in our Education section with multiple indicator guides with tips on how to install or use them together with the MT4 trading platform.