Oil and Gas

Oil trading with CFD

Surprising as it might be, anyone can invest in the oil market to make a profit. Indeed, the development of online trading platforms has allowed individuals to use their savings to speculate on rising or falling oil prices. To this end, simply choose your method of trading between the CFDs offered by Forex brokers, which are specifically designed for beginners. Global Coin FX makes a point to explain how these two trading tools work and how best to use them for profit.

CFDs for investing in oil:

At the present time CFDs are undoubtedly the most appropriate tools for investing your money in the oil price. They are in fact ‘Contracts for the Difference’ that are available online through broker trading platforms and enable individuals to speculate on the price per barrel of WTI or Brent crude oil from a secure area online. More precisely, CFDs enable you to take position in just a few clicks, on buying and selling positions on the crude oil stock markets. You can thereby speculate on the rise or fall of the oil price and close your positions when the price per barrel has attained the price objective that you fixed. Your profit will correspond here to the price difference between the opening time and closing times of your position in proportion to the amount invested and if the price has moved in the direction you forecast. In the case to the contrary your loss will also represent this price difference. CFDs offer numerous advantages including the fact that they are very easy to use, even for individuals that are not used to investing alone on the financial markets. Another thing, they offer a leverage effect that enables an increase in the amount of your profits even with a small difference in rate. Of course, you also have a wide range of tools available such as orders that enable you to effectively manage your positions and reduce your risks. You will of course find lots of information about oil trading using CFDs on our website which also offers advice on how to best use these trading instruments. In this way you can start to use them when investing your capital in oil without having to go through an intermediary.

Benefits of investing in oil:

Traded oil has many advantages compared to other popular assets such as for example stocks. Speculating with oil only requires some basic technical and fundamental analysis of the market. Terms seem complicated? Not to worry! The website Global Coin FX was specifically created to assist investors in understanding the rules of investing in black gold and thereby enable them to easily gain access to this opportunity. You will have the upper hand to quickly make profits and earn money simply through oil price changes.

Let us take a simple example:

The actual price of a barrel of WTI is 106 dollars and you foresee a rise in this price due to a decrease in the American oil stocks. You therefore subscribe to a CFD on the rise. If the price per barrel does rise you can place an order or manually close your position and you will make a profit equivalent to the difference between your subscription price and the closing price. If, to the contrary, the price falls you will lose the difference between the subscription price and the closing price, unless you have speculated on the price falling.

The indicators to take into account for oil trading:

To trade in oil online using CFDs it is strongly recommended to use data from both technical and fundamental analysis. Your technical analysis can be completed using comprehensive customised charts that are available through your broker on the trading platform upon which you can display different indicators. Concerning fundamental analysis, this consists of monitoring and analysing the factors and exterior events that may influence the oil price. These of course include data on the supply and demand of oil throughout the world as well as other indicators. For example, the American oil stocks are carefully monitored by traders. You will find them each week in the economic calendar as they are published every Wednesday. These stocks give you concrete information on the demand and consumer levels of oil. Large stocks have a tendency to lower the price of oil and vice versa. Finally, the U.S. Dollar rate can also influence the oil price as an advantageous exchange rate can encourage buyers to invest in the commodity which is quoted in this currency.