October 18, 2021
Other than gold, crude oil is one of the most profitable trading commodities for traders. Though lucrative, trading in crude oil is not easy, especially if you do not have the right strategies, and are unaware of the crude oil inventory. There are risks involved in trading crude oil. Because of the lack of a proper plan, small traders often find it tough to take advantage of the enormous opportunities that this precious commodity offers. So, to make it easy for small traders, we have listed some proven strategies that will help you make significant profits by trading in crude oil.
Buy and hold
Among the many strategies that traders employ in crude oil inventory today, buy and hold is the most popular. It is convenient and helps traders to reap lucrative benefits. Just like other commodities, crude oil also works on the principle of demand and supply. In this strategy, traders take into consideration the factors of demand and supply. Accordingly, they take a calculated position. If the trader’s prediction turns out to be accurate, they immediately close their position and make lucrative profits.
Prepare a good trading strategy
One of the essential factors that a small trader must consider when he is trading in crude oil is to create a sound strategy that will help him reap profits. Not having a plan, or owning a weak one, will prove detrimental and lead to losses. There is a big difference between crude oil trading and stock market investment. The latter is usually based on emotion and speculation, but that is not the case with crude oil. To ensure profitability, you must have a proper understanding of the energy sector. For this, it is essential to take the help of market advisors. You need to be well informed or have experts that are well versed in the social-economic and political trends across the world, especially in countries exporting crude oil. In case there is a drastic change in the trends, you will determine how it will impact your trading in crude oil inventory today.
Types of crude oil
There are two types of crude oil trades: Brent and West Texas Intermediate (WTI) crude. Both of these types are unique and have their respective strengths and weaknesses. Brent is extracted from the oilfield, while WTI is one of the global oil benchmarks, and is produced in the United States through fracking. While some countries like India import Brent, others utilize WTI. You can trade in any of the two varieties, but you need to be conversant with how the two varieties perform, and which one will be profitable.
Spread trading is a very effective strategy, and if you use it well, it will give you handsome returns. In this strategy, the traders purchase crude oil contracts in a particular month and sell off another crude oil future contract. This way, the traders can reap benefits from the changes between the purchasing and selling prices of the two contracts.
To get the maximum profits, you need to be well aware about the factors that influence crude oil trade. Some authentic inventory data that you can consider include – US API Weekly Crude Oil Stock, US Crude Oil Inventories, US Gasoline Inventories, and US EIA Weekly Distillates Stocks. These reports will give you precise information about the outlook, demand and supply etc.
Whether you are a small trader or a leading firm, crude oil trading is highly profitable. But it would help if you did it the right way. By devising a sound strategy, knowing the crude oil inventory today, and partnering with the right investors or firms like Enrich Broking, you will be able to reap enormous benefits. So for the best results, partner with authentic and reputable companies like Enrich Broking, and kick-start your successful trading in crude oil.