Trading crude oil strategies

Crude Oil Trading Strategy

The price of crude oil fluctuates each moment as it is publicly traded on an exchange. The price of crude is not only determined by global supply and demand and the fundamental outlook for the physical commodity, but also the outlook and supply of demand from traders.

A day traders job is not to assess the "real" value of crude oil. Instead, day traders profit from daily fluctuations in the price of crude, attempting to make money whether it rises, falls or its value stays nearly the same. Day trading crude oil is speculating on its short-term price movements. Physical crude oil isn't handled or taken possession of, rather all the trading transactions take place electronically and only profits or losses are reflected in the trading account.

There are a number of ways to day trade crude oil. A futures contract is an agreement to buy or sell something--like crude oil, gold, or wheat--at a future date.

Crude oil futures trade through the Chicago Mercantile Exchange CME Group. There are several types of crude oil, and contracts, which can be traded.

This increment is called a "tick"--it's the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss. The amount you need in your account to day trade a crude oil futures contract depends on your futures broker.

The amount required by your broker to open a day trading position is called Intra-day margin; it varies by broker and is subject to change.

If you have a stock trading account you can trade the price movements in crude oil. The products trade like stocks.

The amount you need in your account to day trade a crude oil ETF depends on the price of the ETF, your leverage and position size. Search the site GO. Day Trading Stock Markets Basics Trading Systems Trading Psychology Trading Strategies Risk Management Forex Technical Indicators Options Glossary.

How To Profit From Oil Volatility With The Following Strategies | Investopedia

Updated October 13, The value of the ETF and ETN are reflective of daily percentage price changes in crude oil. Get Daily Money Tips to Your Inbox Email Address Sign Up.

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