In this blog, we will cover crude oil day trading indicators to help you throughout your trading.
Many new traders find it interesting to trade commodities and futures contracts as these markets are both reliable and profitable. There is no doubt that these markets are profitable, especially considering the volatility of commodities such as crude oil, which is one of the most commonly traded commodities in the world.
If you’re new to the trading world, you need to learn all about trading crude oil and crude oil futures, more so if you’re a day trader.
Let’s dive in and learn all we can about trading crude oil.
Day Trading Crude Oil
Day trading has been gaining a lot of popularity as highly volatile markets can be used to trade commodities and make quick gains, usually within a single trading session. The concept of day trading relies heavily on the volatility of the market and traders can utilize the fluctuating prices to predict a price increase or a price drop. In some cases, trades are opened and closed in a matter of seconds as the price shifts constantly.
Crude Oil Futures
A futures contract allows the deal to be locked in with an agreed-upon price and saves both the buyer and the seller from unpredictable price fluctuations.
For example, a futures contract for 100 barrels of crude oil at $90 per barrel and a time duration of 6 months would mean that in 6 months, the seller will have to sell 100 barrels of crude oil at the agreed-upon price and the buyer will have to buy them. Regardless of whether the price skyrockets or crashes, the deal will stay locked in for both parties.
Crude Oil Buy/Sell Signals
When it comes to the trading jargon, the word ‘signals,’ denotes suggestions for opening or closing a trade. This analysis is used to make a prediction or a forecast regarding the price of crude oil, whether it would go up, down, or stay around the same levels. Crude oil buy/sell signals are the sharing of this forecast as suggestions to traders who can use this information to make their move.
Many new traders and in some cases, experienced ones too, are heavily reliant on trading signals before locking in a trade. These signals play a vital role as they offer expert opinion and help a trader increase their chances of a potential gain. One of the best platforms for crude oil signals is Platinum Trading, where traders get accurate analysis and reliable suggestions.
The Concept of Bearish and Bullish Moves
When an investor is “bullish” on a particular trade or a commodity, they have positive expectations about the price and predict them to go up. This optimistic behavior is usually based on a variety of factors such as financial performance, news about the commodity, or an increase in demand that may result in increased prices. Such investors often take a bet on their trade and act in favor of buying more of the commodity.
Those who are bearish expect the price to go down. Bearish investors are likely to move toward selling the commodity or they may avoid purchasing more of it. A bearish investor would wait till the market shifts before purchasing the commodity.
It shows the investor whether they are being bearish or bullish.
Trading Indicators for Crude Oil
Indicators can help you in evaluating technical analysis and making the right decision at the right time. Let’s take a look at some of the most popular trading indicators and how they can be used to understand market trends.
RSI Indicator for Crude Oil
The Relative Strength Index more commonly known as the RSI is a tool that shows overbought or oversold levels of a commodity. These levels are essential to make a successful forecast regarding the increase or decrease in price.
Like most commodities, the RSI indicator can also be used to make a judgment about Crude Oil’s trends. It is an effective tool for analysts to determine when a trend is coming to an end or when a new trend may be beginning.
The RSI indicator for crude oil is a single line that goes between 0 and 100 with 50 being the mid-point. Hence, investors can start purchasing crude oil at this point.
Understanding Moving Averages
Moving Average or MA is one of the most common indicators used by almost every trader. After understanding the trend shown by the Moving Average, traders and investors can make their moves accordingly.
MACD is the acronym for Moving Average Convergence Divergence and similar to Moving Average, it is a trend-predicting tool. There are several MACD strategies such as histogram and crossover that traders can use to their advantage.
Best Time to Trade Crude Oil
While crude oil is traded for almost 24 hours, there are specific times when the commodity enjoys high liquidity. There are no fixed times but between 20:00 (UTC +8) and 13:00 (UTC +8) is often considered as the best time to trade a commodity such as crude oil. This is due to the fact that NYMEX is open during these times and much more trades are going on.
Best Indicator for Silver Trading
The RSI (Relative Strength Index) and Moving Average (MA) are often considered the best indicators for trading commodities such as gold and silver, as well as copper. They are also suitable for crude oil trading.
Let’s take a look at some of the questions you may have.
What Are The Best Commodities For Day Trading?
Some of the best commodities for day trading are crude oil, gold, silver, and natural gas.
How To Improve Trading Skills?
You can crosscheck your forecast and predictions with a reliable platform that offers trading signals.
If you’re thinking of jumping the train and looking to start trading crude oil, make sure to use technical analysis so that you can make an informed decision and trade successfully.