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What are some crude oil trading strategies?

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Quick Answer

Because crude oil is a highly volatile type of commodity, one of the best strategies for getting the best return on an investment in oil futures is to trade quickly, as reported by Money Crashers. Short sales and quick trades can be the key to actually making a good return on investment in this area, but because this part of the market is so extremely volatile, there is no real way to guarantee good fortune in oil trading. Generally, the price of oil is tied to the price of oil futures, so investors who predict that oil prices may be moving up or down may want to buy or sell crude oil futures accordingly.

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Full Answer

Another strategy for successfully trading crude oil is to keep a close eye on market trends, advises CommodityHQ.com. If global financial markets seem to be trending upwards, it may be a good time to invest in crude oil. However, it is important to watch long-term trends rather than the trend during the course of a few hours or days. Oil future prices can start the day high and end up much, much lower within just a few hours. Caution and a willingness to take big risks for potentially high rewards are a general strategy that can be useful when dealing with this particular commodity.

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