Oil on Forex
It would seem that an error has crept into the title of the article, because Forex is a foreign exchange market, accordingly,
only currencies can be traded on it.
But the well-known metatrader trading terminal allows you to perform operations not only on the foreign exchange market, so assets such as gas, oil or precious metals can also become trading tools.
Oil on Forex can be bought or sold just like any currency; technically, this operation is no different from trading currency pairs, but there are still some differences.
• Oil quote - displays the price for 1 barrel, that is, how many dollars will need to be paid for 1 barrel of oil, currently the price is around $100.
• 1 Lot of oil - as when using currency pairs on Forex when trading oil, there is a standardized size: 1 lot of oil is equal to 100 barrels. Which, at its current value, is approximately $10,000.
• Oil spread - ranges from 3 to 15 dollars per barrel, that is, when opening a transaction of 1 lot you will have to pay on average about 30-150 dollars, depending on the market situation and trading conditions that are set dealing centers. If we compare spreads for currency pairs, the commission for oil is noticeably higher, which means that oil trading involves longer maintenance of transactions.
What is needed to trade oil?
Choose a broker who has this trading tool and download the trading terminal, then everything follows the standard scheme - we top up the account, find oil in the quotes window, if it is not there, add it.
To do this, click on the quotes window with the right mouse button and select "Symbols" oil is in the "section"Futures". Add and open an oil chart for analysis and trading.
Oil trading has its own characteristics - it is advisable not to use large leverage and avoid short-term transactions, the price of oil also has a clear seasonal relationship, in general it is a fairly successful tool for making a profit with good price predictability.