TRADING IN OIL with MT4

Hi all,

I guess with all the problems happening around the world esp with US and Iran and Union strike in Nigeria, one should be able to take advantage of this with oil prices shooting up and make some profits. If you know any thread started with Crude oil trading for newbies like me pls point me in the direction.

I use Alpari’s MT4 platform, can you tell me the symbols of oil and how to locate and trade them. Also can meta trader trade oil??

Hello and welcome.

I don’t trade Oil for the very reasons I’m about to give you to think about:

Don’t ever go fooling yourself that with Oil that if ‘X’ happens then it’s a ‘no brainer’ that ‘Y’ is going to happen. Oil trading is a “specialist’s game”. If you’ve got loads of money and simply buy Oil now and can ‘sit on it’ for a few years: I’d say ‘no problem’. But a new trader trying to TRADE Oil??? It’s not something I’d recommend i.e. “don’t try this at home”. LOL!!!

To answer your questions (whether you take my advice seriously or not):

Yes: Oil can be traded using MetaTrader if your broker offers it for trading. You’ll have to ask Alpari if they offer Oil for trading on a Spot FOREX Account i.e. Oil is traded as a Futures Contract so normally the symbol name will vary according to which Futures Contract you’re trading. Unless it’s a broker where they offer you what’s normally called a ‘Daily Rolling Contract’ in which case it could be called anything from ‘OIL’ to ‘COIL’ and you don’t have to worry about which Futures Contract you’re trading (in this case it’s normally the ‘Front Month’ or ‘Current Month’ Futures Contract that you’d be trading).

Put it this way: if, as a new trader, my last paragraph makes sense to you, then ‘go for it’ (but even then: note my warning above).

Regards,

Dale.

yea Dale, ur first sentences made serious sense to me. your second paragraph shows you knw alot about this yet you discourage it. I respect pple with self restraint who arent greedy. thx

Hello.

Don’t go fooling yourself about that (that I have self restraint and are not greedy)!!! I guess I forgot to mention that I had to lose a lot of money on Oil too a long while ago for me to be able to give you that advice!!! LOL!!!

Seriously though: I honestly believe it’s a specialist’s market. There are traders that trade ONLY Oil for a living and I think that it’s taken them years to learn every little nuance about Oil and how it ‘behaves’. Oddly enough it’s a bit like Gold really. Sometimes you can look at a chart and it APPEARS as though there’s these BEAUTIFUL long and easy to trade trends. And then, all of a sudden, ‘as if by magic’, ‘BAM’, the price drops, shoots up the next day like nothing happened the day before, and the ‘BAM’ again. What I’m saying is that it can be (IS) very volatile and I doubt that I’d ever trade it myself again ever. Put it this way: at least not based on my understanding of the fundamentals. A decent technical trading system COULD ‘do the trick’. I guess what I’m saying is that I’m not trying to put you off and that you CANNOT trade it. I just think that you need to have a technical trading system that you ‘know like the back of your hand’, have back tested it (paper traded it) for MANY MANY months if not years to see if it’s profitable on Oil and THEN, depending on the outcome, ‘go for it’.

But also remember: thus far I’m the only person that’s answered you. I’m sure you’ll get more input and maybe even input from a trader around here who is trading Oil CONSISTENTLY profitably and they’ll be able to help you out. Quite possibly: there’ll be a few that will DISAGREE with me too. As with every post on these forums (and others): you’re only going to get the opinion of the poster if that makes sense.

Regards,

Dale.

I do agree with dpaterso.

I know a team who trade only OIL for living. Unfortunately, they did not share strategy to me.
From then I keep my eyes on OIL everyday.

To become successful in OIL trading you must keep eyes on both the FA and TA. A proper SL is must for OIL trading. Otherwise, it may blow up your account within minutes…In short “Please try this at HOME at least 1000 times. If you are successful, try it in your Live account.”…

Merits: In last October, OPEC announced that they want to see OIL price around $100. At that time oil price was about $80…Ultimately, price touches $103 within few weeks. That was a great chance of making lots of pips…

Demerits: Sometimes, it is so volatile that, a novice trade might not be able to fight those battle with BIG guys…


Rhetorical question: how can oil shoot up when the Saudis and OPEC agree to strategic stability measures of releasing barrels in the ‘strategic store’? Millions of barrels in supply is routinely choked to inflate prices. I see Obama making some calls to call in some favours. It’s election year this year :slight_smile:

Edit: unfortunately I can’t help with MT4 as I don’t use it.

Now THAT one I like!!! LOL!!! Well said!!!

Regards,

Dale.

hmmm, I like the responses am getting from everyone on this thread esp from dpaterso. thnx JOYNAL2U. i still wanna knw what symbols represent crude oil on MT4 because i know Alpari supports it. I just wanna trade on my demo. my live account is a no-go area.

Hi.

Well here’s link to Alpari UK’s CFDs (‘Contracts for Difference’) on Energy Futures which includes Oil:

MetaTrader 4 - Alpari (UK)

You’ll not the different instruments codes according to the underlying Futures Contract being traded (just scroll down the pages to the bottom table). Remember also that there is WTI (‘West Texas Intermediate’) and Brent Crude. The only thing I cannot fathom from their website is what TYPE of account you need to have open. It would appear that you need to open a MetaTrader 4 CLASSIC ACCOUNT. See here:

CFD Trading - Alpari (UK)

But this you’ll have to check with Alpari I’m afraid. Watch out for account minimum openings and make sure that you’re not under capitalised so that you can mange your risk (never risking more than 2% or your total account balance on any single trade is the sort of ‘generally accepted rule’) so you need to check what the lot sizes are and what the USD or GBP value per point movement in Oil is depending on the lot sizes. There’s unfortunately a lot that goes with the trading of CFDs on Futures of any kind i.e. it’s not as easy and straightforward are trading Spot FOREX is what I’m saying.

If you’re looking for a good explanation of what a CFD (‘Contract for Difference’) is then see here (it’s eplained in detal in a way better than I could explain such):

CFD | CDFs Trading | CFDs Education

Regards,

Dale.

handsome2006,

There might be a few ways to play the oil market without actually trading oil.

A few years ago one of the regulars here on babypips followed oil and had some experience trading it. To filter out some of the volatility and risk this trader continued to follow the oil markets but started trading the CAD pairs as he/she would have traded oil.

He/she found the CAD pairs and oil had a pretty strong correlation. Every Wednesday when the US oil inventory reports came out he/she would watch and trade the USD/CAD, EUR/CAD and JPY/CAD pairs.

I guess another advantage to trading CAD instead of oil is the amount of capital, you can be up and online trading CAD with a lot less than you would need to trade oil contracts.

When I started trading stocks in 2005 I followed the crude markets and traded the oil service stocks. It worked pretty well, when crude was going up so did the oil services, but without the crazy swings and volatility.

I would also trade a few of the smaller refineries, trying to play something called the crack spread. Sometime the crude inventories were high, and gas inventories were low, allowing the refiners to produce higher priced gas with lower priced crude. I’d short the refineries if the spread went the other way. I won’t get into the fun and games during hurricane season, that’s another story. LOL!

Oil related ETF’s could be another way. The point is, there can be a lot of ways to play the oil market without the risk of trading oil! :slight_smile:

Some VERY fines points made d-pip.

When did YOU get so clever??? LOL!!! I only ask because you seemed to have done a bit of a ‘disappearing act’ at some point if memory serves me correctly.

You are right of course about all the alternate ways of trading oil. Sorry but I have the ‘knack’ of having ‘tunnel vision’!!! LOL!!!

ONE thing that may be of interest (whether is applicable to this thread or not) is that Natural Gas is starting to get it’s fair share of exposure on the likes of Bloomberg TV etc. Apparently a lot of big funds are slowly getting ‘in’ long or at very least it’s ‘on their radar’. Just an observation.

Regards,

Dale.

I’m around and lurking almost everyday but I have mixed feelings about posting on a regular basis.

Usually there’s too much silly stuff going back and forth, don’t have time to get involved with the foolishness. Been there, done it and don’t need it!

PS: I was born clever! LOL

I go through the same stages to be honest (although it may not be obvious at times).

Silly stuff??? Well I agree with you there but let’s face it: there’s been some of THE most ‘entertaining’ threads EVER started here in the past month or so.

‘Born clever’!!! I like that!!! LOL!!! Good answer. Can I ‘borrow it’ from time to time (not that I’ve ever been asked that question but just in case it happens in the future)!!! LOL!!!

Regards,

Dale.

thnx Dale, checked out the websites. real informative

thnx d-pip.

Hello.

It’s my pleasure and I hope the information was helpful.

There is one other link that I forgot to give to you:

Trading Conditions | CFD trading | DF Markets

On that link you’ll see what I was meaning about the different underlying Futures Contracts and their Instrument Codes.

Do note though that THAT Oil is not tradeable via their MetaTrader Platform but via DF Trader (or Delta Trading at Deltastock).

(DF Markets if a wholly owned subsidiary of Deltastock by the way in case some are wondering i.e. you can bet your ‘ar*e’ that if this were not the case I’d not be providing the link. The only difference is that they are REGISTERED AND REGULATED in the UK / FSA)!!! LOL!!!

Regards,

Dale.

Although this is an old thread, nobody seems to answer the question re: placing Crude oil trades WTI on an MT4 platform. I’m using ETX MT4, but I guess most other providers are similar. Open the “market watch” list. (red/blue icon) Right click somewhere inside the list and select “Show All” Scroll to the bottom of the list, where you will find commodities. You will find Nymex-** with different expiry dates. Hover the cursor over the Nymex entries to select the market that you require. e.g. Nymex-N6 Crude CFD expiring 20/06/16. Right click and select “Chart window” to display chart and customize chart to your preferences. A 1 lot trade returns $100 for a $1 price move (100 pips) with my broker. Currently 6 pip spread. If you must trade Oil be prepared for volatility, use a stop loss and GOOD LUCK !

I know this is old, but a great bit of information is this.

Instead of trading oil, trade oil based commodity currencies. EG USD/CAD , USD/RUB or the likes.

USD/CAD has 93% negative correlation with oil. When oil prices go up, USD/CAD is bear.

This also helps from having to trade or keep up with different oil prices like:
WTI Crude
Brent Crude (major benchmark price used to price two thirds of the world’s internationally traded crude oil supplies. Sourced from the north sea)
Mars US
OPEC Basket (weighted average of prices for petroleum blends produced by OPEC members. Members include Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, & Venezuela)
URALS
Louisiana Light
Bonny Light
Mexican Basket
Natural Gas