Oil futures trading strategies. Crude oil is one of the better commodities to trade. It is a very active market and it is well known to investors around the world. There is usually no shortage of news to cause the price of oil to move from day to day. This presents many good trading opportunities, whether you focus on day trading futures or you are a.

Oil futures trading strategies

Most profitable and simple crude oil intraday strategy

Oil futures trading strategies. Day Trading Crude Oil Futures - Crude Oil Futures volatility offers a different market personality than stock index futures.

Oil futures trading strategies


Crude oil futures traders can match their trading strategy with their risk tolerance. Crude oil futures are known for their high volatility and wide price swings. By analyzing the crude oil futures market, traders select the tactics they believe will result in a profit before the crude oil futures contract expires.

Buy and hold is probably the best known and most widely used trading strategy. Traders analyze fundamentals such as supply and demand and the geopolitical climate, and buy a crude oil futures contract in anticipation of a price increase or sell a crude oil futures contract if expecting the price to fall.

The price must make a big enough move to give the trader a profit before the futures contract expires. Crude oil traders formulate their investment decisions by applying technical indicators to crude oil price charts over different time periods.

By using the same technical indicators on a two-minute chart, five-minute chart, one-hour chart and a day chart, traders decide whether to buy or sell a crude oil future.

Technical traders often hold their positions open a week or longer to give the trade time to develop. Swing trading involves buying a security and holding it for a short time period that ranges from a few minutes up to four days.

Swing traders buy a futures contract if the market is trending up and sell if the market trends down. Swing trading is very risky, and traders can lose money quickly if the market unexpectedly moves against them. Spread trading involves buying one crude oil futures contract in one month and selling another crude oil futures contract in a farther out month. The goal is to profit from the expected change between the purchase and selling price of both contracts.

The trader would buy a March contract and sell a June contract to close out the trade. But if the spread contracts, the trader will realize a loss.

She received a bachelor's degree in business administration from the University of South Florida. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.

These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. Buy and Hold Trading Strategy Buy and hold is probably the best known and most widely used trading strategy.

Technical Analysis Trading Strategy Crude oil traders formulate their investment decisions by applying technical indicators to crude oil price charts over different time periods.

Swing Trading Strategy Swing trading involves buying a security and holding it for a short time period that ranges from a few minutes up to four days. Spread Trading Strategy Spread trading involves buying one crude oil futures contract in one month and selling another crude oil futures contract in a farther out month.

References 2 Oil Trading Systems: Crude Oil Futures Trading About the Author Based in St. Zacks Research is Reported On:


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