The price of oil is very volatile. Taking trades in the oil market requires a strong analytical ability. Many rookies in Singapore have lost their investment by trying to execute the trades with high risk. When the market volatility is very high, you must reduce the risk to a great extent. Taking too much risk and trying to secure a big profit from this market is not going to work. To ensure the safety of your trading capital, you must know the key steps followed by professional traders in Singapore. It’s true that the trading approach greatly varies but you will always find some common traits.
Step 1, identification of the trend
Identification of the trend is the most important part of the oil trading process. Due to the trending nature of the oil price, you mustn’t be trying to trade the reversal. Learn to draw the valid trend line using three connecting points. Using the minute or the hourly chart in the analytical process is not going to work. You have to use the daily and weekly time frame to improve your skills. Once you become good at analyzing the price data, you will realize the power of the trend trading method.
Being a trend trader, you should analyze the economic news also. The global economic announcement can have a heavy impact on the price of oil. If you are not aware of that, you might have to lose some trades due to the high level of market volatility.
Step 2, creating the trading method
You need a unique trading method to trade the oil. For that, you must find a great broker. Feel free to navigate here and find the details of the offering from Saxo. By choosing Saxo as your prime broker, you can have a free demo account where you can analyze the critical market data with a high level of precision. And this will also help you to make some big profit from this market. Once you become good at analyzing the market dynamics in the demo environment, you can think of making the switch.
Never make the switch to the real account unless you can consistently make a profit in the demo environment. It is important that you follow the safety protocol or else it will be very tough to safeguard your trading capital.
Step 3, trading the real market
Joining the real market after learning the basics is a different experience. You should be very careful about the risk exposure. Breaking the rules and trying to secure big gains from the market is never going to work. To ensure the safety of your business, you have to follow some of the most basic rules. For instance, take your trade with logic and follow the direction of the trend. Taking the trades against the major trend in the oil market akin to suicide.
Becoming emotional in the real market can ruin your approach. Control the urge to trade with greed and fear. Without controlling your emotional attachment, it is nearly impossible to succeed in trading.
Step 4, lower down the risk
Being a new trader, you should not risk to mush while trading the oil market. Taking a high risk can help you to earn some big profit but it will increase the risk to a great extent. Following the safety, the protocol is the only way by which you can earn a huge amount of money. Think about the safety features and take a look at the long term goals. Once you become good at analyzing the market dynamics, you will know how to deal with low risk.
You can also take the trades with a low leverage account as it can limit the risk. Never try to find a shortcut in the oil trading business. Use the standard rules before you take any trade.