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Forex Trading

Trading Crude Oil Futures (Part II)

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You might have heard some of your friends talk about trading crude oil futures. You must have been surprised because many people think that trading crude oil futures is only for the hedge funds or really wealthy people. Well, you can trade crude oil futures if you want to. But don’t do it without getting a good training.

Every day perhaps billions of dollars worth of crude oil gets traded. You must be thinking that crude oil contracts get traded between the oil producing countries like Saudi Arabia, Russia, Nigeria and so on with non oil countries. Now to your surprise, New York Mercantile Exchange (NYMEX) is considered to be the hub of crude oil trading in the world. You should be aware of the power of crude oil in the global economy. Crude oil trades around the world. Crude oil is one of the most heavily traded commodities in the world.

Light Sweet Crude is the high grade, low sulfur content crude oil that is more easily refined than the thicker oils. Now crude oil coming out of some of the Venezuelan and Saudi Arabian Oil wells contains high sulfur content and requires special refineries that only process the high grade sulfur crude oil. On the other hand Iraqi oil is close to the ground and has very low sulfur content. Ever heard of Light Sweet Crude? Sulfur content in oil is considered to be very important. Lower the sulfur content in crude oil, the easier and less costly will be its refining. The higher the sulfur content in the crude oil, the more expensive its refining will be.

The NYMEX contract for the light sweet crude is the most liquid of all the crude oil contracts. A standard crude oil contract is based on 1,000 barrels of crude oil that will be delivered to Cushing Oklahoma. The E-mini crude oil contract trades on the Chicago Mercantile Exchange (CME) GLOBEX platform and is cleared at NYMEX. It is based on 500 barrels of crude oil.

A barrel of oil contains 42 US gallons. Crude oil is traded in US dollars per barrel. In other words, the price of crude oil is quoted in US dollars per barrel. Now trading at NYMEX can be open outcry during the regular treading hours as well as electronic web based trading after hours.

Open outcry trading takes place between 10: 00 AM EST to 2:30 PM EST. After hour trading takes place on NYMEX ACCESSS system, an internet based trading platform starting at 3:15 PM EST Monday through Thursday and ending at 9:30 AM EST the following day. Sunday trading starts at 6:00 PM EST.

Open outcry trading takes place between 10: 00 AM EST to 2:30 PM EST. After hour trading takes place on NYMEX ACCESSS system, an internet based trading platform starting at 3:15 PM EST Monday through Thursday and ending at 9:30 AM EST the following day. Sunday trading starts at 6:00 PM EST. It’s always good to visit the website of the exchange to know more. You can visit the website of NYMEX and read a more about the crude oil trading that takes place at that exchange. Trading oil markets requires constant vigil on your part in monitoring the global supply and demand of crude oil. You will need to know which country supplies how much and what the productions quotas are for the time being. This is pretty scary stuff. Now you must know this thing that real companies have huge trading desks with hundreds of traders all betting on the price of oil. Oil markets are about real people trying to figure out how much oil they would need in the next few months to years to run their businesses regardless of whether they are suppliers or users. Trading crude oil futures contracts require you to be in tune with the market sentiment. Trends in crude oil market don’t develop suddenly and they don’t reverse suddenly. This is something good for you as a crude oil futures trader.

As a crude oil futures trader you will need to know how to handle the seasonal cycle in the oil market as well as the weekly cycle. Now every week usually on Wednesday the American Petroleum Institute (API) and the US Energy Information Agency (EIA) releases their weekly supply data reports. If you want to trade crude oil futures than you should know Mark Soberman! What you need to do is click on the link on the left that says FREE EVIL GENIUS TRADING KIT. This trading kit is from Mark Soberman. Don’t worry its 100% safe and legal. You only need to come out of your comfort zone. Download the free kit and find a unique method to trade the crude oil futures! When a trend in the crude oil market develops, it may last for a few months to a year. It all depends on the global supply and demand situation of the crude oil. If you can spot a trend in the crude oil market in its early stage and ride it till its reversal, you can make a good profit. Now, just keep this in mind that crude oil prices are highly susceptible to global geopolitical situation and react violently to any political global uncertainty.

Mr. Ahmad Hassam is a Harvard University Graduate. Trade Dow Futures . Learn Commodity Trading ! Get a totally unique version of this article from our article submission service

Forex Trading

Trading Crude Oil Futures (Part I)

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One thing should be clear to you. Energy markets will be a major focal point in the global financial makers and the global economy for many years to come. The key to understanding energy trading is to understand oil, natural gas, gasoline and heating oil futures.

You must be thinking that crude oil trading is being done only between different countries or hedge funds or highly wealthy individuals. For your information, crude oil contracts can also be traded by retail traders like you and me. NYMEX trades futures and options contracts for crude oil, natural gas, heating oil, gasoline, coal, electricity and propane. NYMEX is also home to trading in metals. Trading in energy futures is centralized at the New York Mercantile Exchange (NYMEX), the world’s largest physical commodity futures exchange.

For smaller traders NYMEX offers e-mini contracts for oil and natural gas that also trades on the GLOBEX network of the Chicago Mercantile Exchange (CME). Trading in NYMEX is conducted in two divisions: 1) The NYMEX Division and 2) The COMEX Division.

Sometimes the rise in oil prices leads to the increase in interest rates through the bond market and the actions of central banks and the other times the opposite happens. Rise in oil prices if often inflationary. As a trader, you should know this fact that oil price rise often tends to slow down the economy and lower retail sales as well as consumer confidence with lower traffic on the highways.

Oil prices and the interest rates generally move in the same direction when viewed over long periods of time. Now you need to understand the Peak Oil Concept. Peak oil is the concept that the world oil production has peaked and the production of oil will never be as high again.

No new major discovery of an oil well has been made in the past two decades. This means that the supply of oil is dwindling while the global demand for oil is on the rise. Now you need to understand the Peak Oil Concept. Peak oil is the concept that the world oil production has peaked and the production of oil will never be as high again. Oil prices and the interest rates generally move in the same direction when viewed over long periods of time.

Oil production in countries like Venezuela, Iran and Nigeria has peaked and is going down. Non OPEC sources of oil like North Sea and Mexico are also showing sign of declining production. There has been no major oil well discovery for the last few decades. Some people consider the Peak Oil idea as controversial but this concept is increasingly plausible given the state of the global oil industry.

Now you should keep these facts in the background of your mind as a trader. In any case, most of the experts now agree that in the next 10-20 years, the oil production will peak and after that it will start declining. 1) Demand fluctuates but supply of oil is finite. 2) The world runs on oil and any threat to the supply of oil often leads to rising prices. As an oil trader your primary goal is to consider the effects of events on the supply of oil and correlate this effect with your charts.

Mr. Ahmad Hassam is a Harvard University Graduate. Trade Dow Futures . Learn Commodity Trading ! Visit the Uber Article Directory to get a totally unique version of this article for reprint.

Forex Trading

Knowing The Primary Trend

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If you are a trader and don’t know anything about technical analysis and how to draw the trendlines and support and resistance levels than you may as well stop trading before you learn and master these concepts. A picture is worth more than a thousand words. Trading would be almost impossible without charts and technical analysis. Trading is all about anticipating and predicating rather than forecasting. Technical analysis is the best tool a trader can have.

The most important thing that you should in a market is its primary trend. Primary trend is the direction of the market that offers the least resistance forward making money. When you follow a primary trend in a bull market you look for strong stocks and in a bear market you look for stocks showing weaknesses. Knowing the primary trend and trading in its direction increases your chances of making money. So how do you find the primary trend and what tools you need to determine the primary trend? You use the following tools to determine the primary trend:

Trendlines: Knowing how to draw and use trendlines gives you an excellent start on any trade. To correctly draw a rising trendline on the chart, start with the lowest low on the chart and connect it to the lowest low preceding the highest high in the chart without bothering about the prices between the two points. Similarly to draw the down trendline, draw a line connecting the highest high on the chart to the highest high preceding the lowest low of the chart without passing through the prices between the two prices.

Moving Averages: Support level is the price where the prices stop falling and the buyers step in overcoming the selling pressure. A break in the support level is an indication that more weakness may be ahead. Moving averages are sues to smooth out the market’s trend over a given period of time and serve as an important support and resistance levels.

Resistance level is the price where prices stop rising and the sellers overcome the buying pressure. A break above the resistance level is an indication that the market is going strong.

Oscillators: Oscillators are graphic depictions of points derived from the mathematical formulas that are plotted below the price charts. Knowing these mathematical formulas is not important as a trader. What is more important to know is the fact that oscillators produce useful mathematical data that can help you tell whether the market is overbought or oversold and whether the momentum of the primary trend in the market is still strong or there is a potential change in the primary trend ahead? Two important oscillators that you should be familiar with are RSI and MACD.

Bollinger Bands: Bollinger bands are also known as volatility bands or envelopes. Bollinger bands give you visual evidence when the market has travelled too far in any one direction. Bollinger bands are calculated by plotting points one or more standard deviations above and below the 20-day moving average. However, you can calculate Bollinger Bands with any moving average.

Mr. Ahmad Hassam has done Masters from Harvard University. Try these cash printing Forex Signals from heaven. First trade on your Forex Demo Account! This and other unique content ‘forex’ articles are available with free reprint rights.

Forex Trading

Good Traders, Bad Traders (Part II)

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Scalper is a workable profile for a small retail trader. However, you should be able to view the overall trend of the market to gauge whether you are trading with or against the prevailing trend. A scalper is also a seeker of short term profits of the level of 25-50 pips.

A scalper might use a 10 minute chart to follow the market, a 1 hour chart to determine the long term trend and the 5 minute chart to time the entries and exits for each trade.

However, sometimes you might not want to close the trade at the end of the day as the trade is in profit and you are expecting more profits if you continue with the trade overnight. There is a rollover cost if you rollover your trades overnight. Be sure if you want to day trade, you know your broker policy on rollovers and the rollover cost for you.

However, sometimes you might not want to close the trade at the end of the day as the trade is in profit and you are expecting more profits if you continue with the trade overnight. There is a rollover cost if you rollover your trades overnight. Be sure if you want to day trade, you know your broker policy on rollovers and the rollover cost for you. A Day trader is looking for larger profits something like 50-100 pips. A Day Trader might use a 15 minute chart to follow the market, a 4 hour chart to determine the long term trend and the 5 minute chart for making the entry and exit.

Position trading is long term like a few months to a year. A lot can happen in few months to a year. The whole world can go topsy turvy. The important question is can you make an investment for that long and survive looking at it for that long.

Each profile requires different scales of charts and time frames but also indicators and money management parameters. If you aim for a 1/3 risk/reward ratio, a Guerilla will risk 5-10 pips per trade, a scalper will risk 15-20 pips per trade, a day trader will risk 25-30 pips per trade and a position trader will risk 40-50 pips per trade.

Even if two trader s use the same charts and technical indicators they might interpret them differently. The differences in money management techniques and attitudes are much less. Good traders tend to share money management and attitude traits. So do bad traders.

Do you want to become a good trader or a bad trader? Always keep in mind that in forex trading a 10 pips move up or down can easily occur within seconds or minutes very quickly without any reason or rhyme. No two traders can be exactly alike.

Mr. Ahmad Hassam has done Masters from Harvard University. Try these cash printing Forex Signals from heaven. First trade on your Forex Demo Account! Get a totally unique version of this article from our article submission service