How You Can Buy Oil with A Forex Broker for Dummies

Many traders think that trading oil both as Crude Oil (WTI or US Oil) or Brent Oil (XTI or UK Oil) is the same as trading any other available commodity with their broker. This is not so. Currency trading is far different from trading in oil. To make a long-term investment, you will have to consider various aspects such as fundamental analysis in order to achieve success except the trader is engaged in scalping strategy or intraday trading. The factors below are some which the trader should bear in mind when trading oil with the forex broker.

For traders who use the MT4, it is possible to trade crude oil as one of several designated energy futures assets. The specific crude oil contract offered will vary from one platform to another.

Contract Designation of Crude Oil

There are two forms in which crude oil is traded. These are grouped according to the varieties of crude oil traded in the international market. These include:

a) Light Sweet Crude (WTI)

This contract comes as the West Texas Intermediate (WTI) contract, and represents of the variety of crude oil which is low on sulfur compounds and therefore cheaper to refine.

b) Brent Crude

Brent crude is produced from the North Sea area and other countries in the Arctic regions of the world such as the UK, Russia, and Norway. This variety of crude is heavier (contains more sulfur compounds) and generally costs more than the light sweet crude variety, since it costs more to refine.

Invest in CFD Crude Oil

There are different ways you can invest in crude oil. You can invest in crude oil by buying it in its crude form although it is difficult to store barrels of oil. You can also buy futures from stock brokers. Future is a contract that grants you the right to buy a large quantity of crude oil without having to handle the product physically. Crude oil can also be bought as part of a fund or Exchange Traded Fund, or as stocks in a company that drills for refines or handles crude oil. However, the CFDs are the most popular way of trading oil.

How to Buy and Sell Oil

How to buy and sell oil on Plus500

If you open an account with Plus 500, you will be introduced to several financial instruments that you can trade. For instance, you will be able to buy shares, foreign currencies, cryptocurrencies and oil at a convenient price. To begin, you need to open an account with Plus 500. As soon as you open your account, you will have the chance to learn with demo trading. You can trade through the instrument listing on the exchange or through ETFS Commodities to view a lot of oil shares in the market.

How to buy and sell oil on plus500 -2

If what you want to do is sell, press the SELL button that is placed to the left of the BUY button. Here, you can sell off your shares and close the position.

How to buy and sell on Plu500 broker

Users enjoy trading on Plus 500 because its interface is easy to use. The moment you become familiar with it, you can start creating your own custom trades with oil within the commodities market. You should try using a variety of investment strategies in order to receive higher returns on your initial investment.

Concluding Remarks

Investors buy and sell crude oil in order to increase the diversity of their investment portfolio and increase the rate of returns. It is useful to get used to trading on a demo account before starting to engage in actual trading so that you do not lose your income. Once you are ready, you can begin testing the strategies you learned while doing demo trading by making a real trade. Make adequate research into the area you are investing in order to understand the peculiarities of the industry and how to make well-guided investment decisions.

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