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5 Steps to Making a Profit in Crude Oil Trading


The concept of electronic trading in India was launched in 2003 and since then, we have been doing a superficial part of commodity trading and that too on a surface level. Especially when it comes to crude oil trading, the investments can get much better platform if you explore this aspect with some bottom line concepts along with a deep understanding of factors which move crude oil prices, its demand and supply. In this post, we have elaborated some crude oil trading tips to be included in your investment strategy which can yield a desired outcome out of your investments.

An exposure to crude oil market

The crude oil market scenario has undergone some major changes during this pandemic period. It is imperative for an investor to gain insights about two most popular grades of crude oil, Brent North Sea Crude and West Texas Intermediate. Both the grades contain different amount of sulfur in them which decides its refining process. Moreover, political shifts, climatic conditions and health crisis like COVID-19 also affects the prices, supply and demand of crude oil. OPEC nations and performance of oil refinery companies, all play a crucial role in deciding the overall demand and supply of crude oil.

Technical Indicators

There are many technical indicators to consider for a better and matured crude oil trading but focusing on Scholastic RSI indicator may work in the initial stage. Understanding the RSI indicator allows you to determine when an asset is overbought and oversold. As a beginner you don’t need to go much deeper on these technical indicators and a shallow knowledge will also help you gain feasible insights about your commodity.

Developing your own strategy

Crude oil trading can’t be done on a trial and error basis and hence you need to develop your own trading strategy which should be based on your overall knowledge about the crude oil market and performance of these key technical indicators. The more you get deep into these, the better will be your investment strategies. Making clear rules for opening and closing trades, crude oil trading hours, evaluating your success rate and forming stop loss rules based on them will guide you enough with your investment plans and policies. Checkout our website Capital Xtend to know more about oil trading.

Set a Risk-Reward Ratio

This is an estimate which is based on return on investments in comparison to the total risk involved in that investment policy. The ratio is calculated by dividing the amount which is expected to be lost due to some sudden ups and downs by the amount of estimated profit which is going to be gained at the closing of a trade. The rule ensures a sufficient amount of margin for a particular trade and its returns. It must be thoroughly revised before making any other investment and helps in maintaining a tolerable risk factor. Set your trading regime based on the crude oil trading hours and keep an eagle-eye on your risk management strategy.

Factors to keep in mind

Elaborating the crude oil trading tips, your investments must include a regular evaluation of these factors and assessing their current scenario if you want to make most out of your crude oil investments. Factors like shifts in global demand and supply, focusing on economic trends which directly affects the demand and supply of crude oil. It has to be understood that crude oil is highly volatile and hence you need to invest enough time in making policies and strategies which can be beneficial for you.


Crude oil concept mainly depends on the above mentioned factors and as far as its volatility is concerned, it can be judged well by your perception regarding these factors and how well you implement them in your trading options.

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