What’s the difference between trading in oil and gold?
As an oil and gold trader, you have the chance to make money whether the price of oil or gold rises or falls. How can this be? You trade in oil futures and gold futures, rather than the underlying physical commodity itself. The oil futures contract (and gold futures contract) represents an agreement between two parties to buy or sell oil at a specified price on an agreed upon date in the future. This creates an opportunity for traders on either side of the contract to profit based on the movement of the underlying commodity’s price over time.
Step 1. Start A Trade Account
Open a trade account with one of a retail foreign exchange dealers. A trade account is a client account that gives you access to global foreign exchange market. Start one today, there are no upfront costs. You just need to provide some basic information including your name, address, telephone number and bank details so they can transfer funds into your new business bank account later.
Step 2. Enter The Chart Settings
The next step is to enter your chart settings. The first thing you want to do here is click on Bar as your Chart type. This will allow you to see each trade on a separate line so that you can easily make comparison. You also need to select how often you would like to refresh your charts. The most common choices are 5, 10, 30 or 60 seconds for day traders and 30 minutes for position traders. Now just click next once more.
Step 3. Get To Know Your Chart Better
As we learned above, a currency chart is divided into candlesticks. Each candlestick represents a period of time (e.g., one day). Candlesticks are color-coded to give you information about each period’s high, low, open, close and volume. Paying attention to these parameters can help you make better investment decisions.
Step 4. Open An Oil or Gold Trading Account
Whether you choose to trade oil or gold, there are a few different ways to go about it. One of these options is opening an online account at a broker. These brokers allow you to buy and sell commodities with a relatively small investment, which is ideal for beginners. While you may need to pay a commission every time you make a trade, many of these costs are waived if your account stays under a certain balance.
Step 5. Learn The Language Of Traders
If you’re going to become a trader, then learning a bit of lingo is a smart way to start. The language of trading is similar to that of sports, with many terms that define what kind of play has just occurred. Learning these terms (or at least knowing their meaning) will help you be able to interpret what other traders are saying about financial markets. If you’re participating in an online forum, it also helps you avoid asking questions about terms that others take for granted.
Step 6. Use Indicators To Identify Trends
Indicators are tools that measure market activity. They can be used to identify price trends and help you determine which direction a particular asset is headed. There are three types of indicators: oscillators, trend indicators, and momentum indicators. Oscillators give you an idea of price movements over a specific period of time. Trend indicators tell you if a stock is moving in one direction or another, such as up or down. Momentum indicators track how fast prices are rising or falling within a specific time frame.
Step 7. Identify Support And Resistance Levels
If you are looking to sell a stock, identifying where it will find support is crucial. Support levels are price points that a stock or commodity will tend to stop at when it falls back after a run up. If support levels are broken, they can trigger massive sell-offs. On the other hand, if you’re looking to buy, knowing where resistance is can help you time your entry so that you get into a good trade at a good price.
Step 8. Open Long Trades At Support Levels And Short Trades At Resistance Levels
When most people think of trading, they think of quickly buying low, selling high. The purpose of a resistance level is to find that top price. Support levels are used when you want to enter trades on long positions at lower prices. This can also be used for short-selling, but it’s not as reliable or straightforward as support levels in an uptrend.