Whether you’re just getting into trading or you’re a seasoned professional, knowing how to diversify and manage your portfolio is something you must be doing well. It’s estimated that roughly 18% of British adults trade stocks in the UK, proving just how popular it can be.
However, putting all your money into stocks doesn’t always guarantee a big return on investment. One asset you could trade instead is the global oil market and while profits aren’t guaranteed in this market either, there are several strategies you can incorporate into your trading to give your chances of success a boost.
So, if you want to add a new asset to your portfolio, our guide below is filled with top tips for you to try when trading the global oil market
Why should I trade oil?
Oil is great to trade because of its high liquidity and volatility, which gives traders an opportunity to trade any fluctuations to return a potentially huge profit. Some of the best oil instruments that you can trade include Brent and WTI, which we’ll cover later on.
How can I successfully trade the global oil market?
So, if oil seems like a commodity you’d like to add to your trading portfolio, make sure you take the right steps to give yourself the best chance of being successful. Some of the ways you can do this include:
- Learn what moves crude oil – Understanding what impacts the supply and demand of the oil industry can help to make more informed decisions.
- Understand the people that invest in it – The oil market is heavily invested by retail traders who tend to put money into assets when they make front-page headlines. This can subsequently lead to high climaxes and collapses, which can put your money at risk or lead to huge profits.
- Inspect the long-term chart – Take a look at the long-term chart of the oil market to see when it tends to rise and fall, and what may have caused this. This can help you make more informed investments should something happen in the world.
- Use a funded trading platform to develop your knowledge and skills – This can help you understand when to trade oil and when to avoid buying, making your investments safer.
- Choose between Brent and WTI Crude Oil – Pick the one you’d prefer to trade and become an expert in that particular asset. Brent is typically used as the benchmark of two-thirds of all oil pricing and WTI is the preferred pricing model in the U.S.
Ready to start trading oil? Get started today and begin reaping the reward of your well-informed trades!
