Many of our clients trade oil. The amount of clients trading oil depends on the recent price action and volatility. Clients can trade whatever resource is in focus at that particular time, for example: gold may be the focus for a month or so, and then all the media and trading focus may shift to oil. We see these changes of focus happen regularly in our business and it helps to have the ability to trade different products from the one platform.
The best way to start trading oil is obviously to get a CFD provider that trades oil. I also suggest that a find a CFD provider that can give you advice on the products it provides.
The next step is to keep a close eye on all the technical moves in oil. Get your hands on a sufficient chart system; once again your CFD provider should have this for you.
Not only should you be watching the technical aspect of oil, you can form an opinion on the fundamentals of oil as well. To find information on the fundamentals is more difficult. You will find plenty of articles on oil giving you both sides of the story but it is really going to be up to you to how much you want to dive into all the articles written.
In conclusion, once you have formed your view on oil, trade it on leverage. Work out the largest move that could go against you and see how much you are prepared to make or lose. This will tell you what your trade size should be. I would suggest that when you first start trading you take a smaller position so you can get a feel for what you are trading. Once you are comfortable with what you are doing then you can raise your trade size accordingly.
Hamish McCathie, Director, CFD Trading
Disclaimers: The views expressed in this article are those of Hamish McCathie, a representative of CFD Trading and is not intended as general advice. This does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs.