Rules of oil trading and price following.

Oil prices is something out of the fantasy. I mean understanding and predicting their movements is a fantasy for a lot of traders. But, lucky for us there are some points that we can follow in order to try and predict the movements of the asset.

So, here are the main points of the prediction

1. Look what can move oil price.

You need to look for exactly the times the oil prices jumped or fell. You need to compare that with the supply and distribution news and voila – you are going to have an understanding of the movements of the oil price as you see news about the supply.

That is neat knowledge, as it seems very easy to do so, but it is not always the occasion. Sometimes the price can move unexpectedly or make a move which was not supposed to happen in the first place. Although it is rare that that happens.

2. Know who can move oil price.

You need to know the biggest names in the industry. You probably know that there are two main benchmarks – WTI and Brent. But who moves them? And who owns the companies that move the asset? That you need to know as you are going to be able to follow the news for a particular group of individuals and correlate the changes in the price with the changes in their lives and policies of their countries of residence.

It might seem unimportant, but believe me, it is. Very much so. Look in political climate in Russia. Do you think that is not going to influence Brent price in the future? It has once before and there is nothing stopping it from happening again.

3. Look at the long-term performance.

You need to know the history of your asset. And you need to be able to see and know the whole picture. You are only going to reach that by seeing long-term trading charts for the chosen asset. Historically speaking the whole picture is going to bring you a better perspective on the asset trading in the future.

Plus, long term trading is something you are going to learn from experience. What if you want to long oil? Watch the chart and learn!