Friday, 9 May 2008

Don't Get Burned by Oil

Making a living out of trading, whether you trade using a leveraged account such as CFDs, Futures or otherwise, on normal day to day stocks is hard enough, never mind trying to catch the wild swings we have been having on Crude Oil, recently.

I know of quite a number of experienced traders who have burnt their fingers trying to play with the black stuff with the limited amount of margins they have had at their disposal.

If you are the type of trader who is compulsive in trading an instrument such as Oil, I could only recommend to you that keep your initial stakes at minimal and most definitely use Stop Losses to limit your losses. It is extremely possible that in trading such an instrument a trader could easily get wiped out and throw away the results of months of earnings and efforts on a single trade.

One other thing you should never do as a good trader is try to guess the top or the bottom of any market -- you should just be content with taking a day's pay as how you see a trade develops on any given day, unless you are a big player with a deep pocket, in which case, you could try having swing trades aiming for the big pay-outs.

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