Oil is the most popular commodity among traders. With a constant supply and demand, liquidity is rarely hard to find and volatility as almost as high as in bitcoin.
There are a number of oil trading strategies, but Trend Trading and Range Trading tend to be the most popular among traders of all levels.
A trending market is one that is consistently making new price extremes. For example, an up-trend can be seen by identifying a series of higher highs and higher lows. A down-trend market is identified with a series of lower highs and lower lows.
Trading oil can be made easier when you understand the benefits of trend following. There are different techniques to determine the direction of a trend like drawing trend lines or using moving averages. You can take advantage of the volatility to earn huge profits. Just look at the chart of oil and you realize that this might be the best timing.
A range trading strategy is used when a market is in consolidation, meaning during a period when markets tend to be range-bound.
The silver market does not always trend upwards or downwards, it often enters periods of consolidation when the prices move ‘sideways’. This is not bad news for traders as there is a strategy to trade markets in consolidation. How does it work? First, determine the range, then filter your signals and finally execute the trades, but don’t forget to set stop-losses and take-profits.
Oil has its own price drivers that you’ll need to watch when trading. Dollar, inflation and financial or political crises are among the major ones to follow. But there is more. Oil price is influenced by the level of demand which is related directly by the prospect of global economic activity. Expected supply is linked with any war-related disruptions from Middle-East and elsewhere, and the likelihood of OPEC members curbing their production.
Virtuse Exchange leverages Digital Asset Collateralized Contracts (DACCs), a model that allows converting your cryptocurrencies into commodities, without having to move money from one wallet to another. The DACCs act rather like a stablecoin whose value can be pegged with a reliable price feed to the value of USD. You can buy and sell crypto oil seamlessly and hold it on your private keys.
Oil is predominantly traded in the paper form as oil futures, which are contracts in which you agree to exchange a set amount of oil at a set price on a set date. Unfortunately, these contracts are traded on large futures exchanges, which are accessible only to large institutions.
While oil importers and exporters use futures to insure against the adverse effects of oil price volatility, you can use them to speculate on oil without buying or selling the commodity itself. That’s because the prices of oil futures will move as the value of oil goes up or down.
Unlike futures, which show prices at a set date in the future, oil spot prices show the cost of buying or selling oil and taking delivery immediately, or on the spot. So while futures prices reflect the prediction of oil prices in the future, spot prices show how much it is worth right now.
To trade on oil prices with Virtuse Exchange, you’ll need to open an account. It takes a matter of minutes, can be done entirely online, and there’s no obligation to fund once you’ve finished your application.
However, you will need to fund before you place your first trade. Funding a wallet account is simple – you can use send USDT, Bitcoin, ETH to your wallet or soon will be able to fund it with a debit or credit card.