If you plan to look for opportunities in crude oil's price movement, there's nothing better than trading in a good broker with low spreads for oil commodities.
One of the most debated financial assets in the market is probably oil. While there are discussions about discontinuing the use of fossil fuels and moving toward green energy, oil is still in great demand. That is why some experts believe that the commodity won't go anywhere anytime soon. The debate surrounding the assets can make oil prices rise and fall among other factors. The price fluctuations have created a great opportunity for traders to make profits, especially from the CFD market.
Generally, there are several types of crude oil to watch for, but Brent and WTI are the world's two major types that come on top. Brent crude oil is extracted from the North Sea while WTI is extracted in the US, primarily from Texas. Right now, Brent accounts for two-thirds of global oil pricing. Besides knowing the differences between Brent and WTI, it is also important to decide how to trade them. In that case, oil can be traded as futures, spots, and even CFDs.
Where to Trade Crude Oils
Aside from ensuring low spreads, a good broker for oil trading should possess other great qualities in terms of leverage, platform, and order executions. Among many brokers who claim to be the best, there are only a few that really stand out. Here are some of them:
When it comes to the best broker with great trading conditions, ICMarkets is a good option. This Australian broker offers a flexible and easy way to gain exposure to some of the world's most popular commodities including energies like crude oils. ICMarkets allows traders to open long and short positions on both WTI and Brent from popular platforms such as MetaTrader 4, 5, and cTrader.
Right now, the spread for Brent crude oil futures as well as WTI futures starts from 0.020 pips with an average of 0.027 pips. Traders can also enjoy high leverage up to 1:500, with an average execution speed of under 40ms. They provide free low latency collocated VPS to make sure there are no requotes.
IC Markets is an online forex broker operating under the company of International Capital Markets Pty Ltd. Traders under the Australian jurisdiction are provided with the trading service of IC Markets AU that is headquartered in Australia and licensed by the Australian Securities and Investments Commission (ASIC).
On the other hand, non-Australian traders who open an account in this broker are registered under IC Markets SEY that is based in Seychelles, and regulated under the Seychelles Financial Services Authority (SFSA). The dual operation is a result of the relatively new rules from ASIC that prohibit their regulated broker to offer trading services outside Australia.
Classified as an ECN broker, IC Markets provide clients with MetaTrader 4, MetaTrader 5, cTrader as platform trading options. This broker also follows market trends to include Cryptocurrencies as one of its products, enriching its already wide selection of trading assets that include Currencies, Indices, Metals, Energies, Softs, Stocks, as well as Bonds.
The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. Market analysis materials are also prepared regularly for trading insights on IC Markets's official website, proving their competence to serve their traders with important contents created by market experts that work specifically for them.
For payment methods, IC Markets allows funding and withdrawal via wire transfer, credit card, PayPal, Skrill, Neteller, FasaPay, UnionPay, as well as Bitcoin via BitPay. The more interesting aspect from this broker is its multi-base currencies that include USD, AUD, EUR, GBP, SGD, NZD, JPY, CHF, HKD, and CAD.
As the trading technology in IC Markets is highly equipped with co-located servers and extremely low latency (especially on cTrader), the broker is widely known for its capability in hosting traders with the special needs for high-frequency trading as well as scalping.
To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese.
2. FP Markets
FP Markets provides 1:500 leverage for their commodities trading, including crude oils. The spread for WTI is 0.04 pips, while Brent's minimum spread is 0.03 pips. This makes FP Markets a good broker for low-spread oil trading. FP Markets provides one of the most beginner-friendly platforms, MetaTrader 4 (MT4), which is available for desktop, iOS, Android, and Mac devices. They also allow expert advisors for traders who want to try automatic commodities trading.
AvaTrade is another broker to consider for low-spread oil trading. They have minimum spreads of 0.03 pips with leverage up to 1:100. AvaTrade is a great choice for commodity traders who are very busy and prefer mobile trading. They are known to have one of the best mobile trading tools called AvaTraderGo. This allows traders to execute trades whether on a business trip, at the office, or on a holiday. For better security, traders can use AvaProtect, a unique feature that reimburses traders for losing positions.
Avatrade can be called one of the most well-rounded brokers that support almost all trading styles. Not only allowing hedging, scalping, and expert advisor (EA), Avatrade also completes their service with One-cancels-the-other order (OCO) and AutoTrading in many variants of automated trading systems.
AvaTrade was founded in 2006, with the primary mission to empower people to trade with confidence. If traders are still confused about what is the best broker for supporting trader's trading, AvaTrade perchance option of traders, because it has been evaluated and honored for some of the industry's most remarkable financial and technological achievements that it provided to clients.
In 2019, the Dublin-based broker got achievement from Daytrading.com as The Best Forex Broker 2019. Besides, the company is honored as Best Forex Broker, Best Bitcoin CFD Trading Provider of the year, and Best Affiliation Programme in the European area.
Furthermore, for traders who have high mobility, AvaTrade provides many platforms that allow traders to trade using laptops and mobile phones. The availability of the free Autochartist tool in the platforms is the best support for both novice and experienced traders because it makes it easier for them to find trading opportunities without the need to glance at charts all day.
The Autochartist free signal is provided in Gold Account, Platinum Account, and AVA Select. By opening an account in AvaTrade, traders don't have to pay for getting a full Autochartist service. Autochartist itself is a market scanner tool that can detect trading signals from various technical perspectives.
Traders can access AvaTrade in many variants of platforms, such as AvaTradeGO, MetaTrader 4, MetaTrader 5, Automated Trading, Mac Trading, Web Trading, Mobile Trading, and AvaOptions.
In terms of regulation, AvaTrade is regarded as a superior broker because it has a lot of credible licenses. That way, even with deposits of up to ten thousand dollars, security can be guaranteed. Applying the Segregated Account system, AvaTrade is regulated by the Central Bank of Ireland (No.C53877), ASIC Australia (No.406684), JFSA Japan (No.1662), and South Africa (FSP 45984).
Can traders lose more than their deposit abruptly in the event of high volatility? AvaTrade explicitly answers no, as traders have negative balance protection.
With a minimum deposit of USD100, AvaTrade offers various leverage depending on the trading instruments; whether it is forex (starts from 30:1), indices (starts from 20:1), commodities (starts from 5:1), ETFs (starts from 5:1), or cryptocurrencies (starts from 2:1).
AvaTrade has committed to a set of values in relation to customers. Therefore, the company provides the best trading experience, offering multilingual customer service and the most sophisticated and user-friendly trading platform.
New traders can also learn forex trading in the Education tab on AvaTrade's official website. Traders will find a wide collection of articles, video tutorials, and more tools that will assist them every step of the way. It is an important requirement as the forex market might be a bit overwhelming and even scary at times, so traders need to make sure that they are fully prepared to begin trading in the real account.
There are many types of account types provided by AvaTrade. There is also an Islamic Trading Account, which is uniquely provided for Muslim Traders. Islamic account type is similar to a regular one with one key difference; it is not subject to any special fees or interests (swap-free), which sits well with the finance principles of Sharia Law.
If traders have felt confident for forex trading, traders can choose AvaTrade as an ideal choice. The minimum deposit and various platforms offered to make it a suitable destination for even beginners who would like to try forex trading for the first time.
OctaFX has one of the lowest spreads for oil trading. The WTI crude oil spread starts from 0.6 pips. However, the Brent crude oils spread is relatively higher compared to other brokers in this list since it starts from 1.1 pips. That being said, they are still a great broker for oil trading. They don't charge round-turn commissions for commodity trading and provide good leverage of up to 1:200 to amplify traders' buying power.
OctaFX is one of the most famous brokers in the world and has won many awards for its very comfortable trading atmosphere and proximity with customers. OctaFX was founded in 2011 with headquarters in Strovolou 47, Kyros Tower, Nicosia.
Prestigious awards that have been received by OctaFX include the Best ECN/STP 2019 and the 2019 Best Broker in Asia given by FX Daily Info. The Global Banking and Finance Review magazine also gave the Best Broker award in Asia in 2018 to this broker. More than that, there were also awards from European CEO Magazine (Best FX Broker 2018 and Best Trading Conditions).
For traders in most countries, OctaFX is under the authority of Octa Markets Incorporated and is registered in Saint Vincent and the Grenadines. This broker also provides various facilities, such as providing support services by live chat and WhatsApp in Indonesian. Not only that, deposits and withdrawals of funds can be done through various local banks. OctaFX does not charge commissions for every deposit and withdrawal of funds made by traders.
OctaFX offers different types of accounts that are carried out with market execution (STP/ ECN) and floating spreads from 0.2 pips. A variety of forex strategies, ranging from Scalping, Hedging, and the use of Expert Advisors are permitted in all accounts at OctaFX brokers.
There is also a fixed exchange rate offer when opening a Micro MT4 account. All deposits made in IDR will be calculated at the rate of USD1 = Rp10,000 and will be entered into the trader's account balance. Also, Swap-free accounts are available for Muslim traders who want to avoid overnight interest.
Trading in OctaFX is also suitable for novice traders. Because OctaFX offers low spreads, which are floating starting from 0.0 pips. The required initial deposit is also low, only USD25. The currencies used on the account are US Dollars and Euros.
OctaFX gives a bonus of 50% each time a trader makes a deposit. That way, the capital gained by the trader becomes bigger. Opportunities to open positions increased and deposit bonuses can be withdrawn on the terms and conditions.
If traders are still confused about calculating profits, the OctaFX platform provides a trading calculator for each account type. Traders only need to enter the currency pair being traded, the amount of leverage, the number of lots, and the type of currency used in the account.
Opportunities to get profits are also getting bigger with the Autochartist feature. Traders will get notifications quickly when there is a profit signal in trading. The accuracy of the trend prediction reaches 83%.
Traders do not need to worry about the safety of funds at this broker. OctaFX uses segregated accounts and protects personal data and online financial transactions with SSL technology. This is adjusted to the international accounting standards and regulations.
Another advantage offered by OctaFX is the Trade & Win program. Opening an account in OctaFX would open the opportunity to collect trading lots, which can be accumulated into a variety of attractive prizes. Traders only need to open a real account on MetaTrader4 or MetaTrader5 through OctaFX and simply exchange the prize lot in this promotion. Prizes that can be obtained by traders include T-shirts, Android Smartwatches, smartphones, and laptops.
Traders need not worry about missing out on promotions. Because OctaFX often bonuses and other promotions. This broker holds a trading contest every week on a demo account with real prize funds that can be used for trading.
One example of a prize contest is OctaFX Champion - MT4 Demo Contest. With a total prize of USD 1,000, there are places for 4 winners in each contest period.
Admirals' crude oil spread starts from USD 0.05 pips. The leverage for these products is pretty high, up to 1:500. Traders can execute orders from MetaTrader platforms that are accessible from both PC and mobile devices. They also allow mobile trading with the Admirals mobile app. Another reason to trade with Admirals is that this ASIC-regulated broker applies a Negative Balance Policy to protect traders from losses due to extreme volatility.
Benefits of Oil Trading
Now, the real question is, does oil trading worth all the hassle? As a matter of fact, oil is one of the best assets to diversify any trader's portfolio. One of the reasons is that oil has a unique position in the financial markets. It is the key resource for vehicles, planes, heating and electricity, and many more. Because the global economy depends on oil, the commodity is widely traded and one of the most liquid products in the financial market. That being said, there are several benefits traders can get from trading oil, including:
1. Better Opportunities to Trade
Crude oil offers better opportunities due to constant price fluctuations. If traders can make the most out of it, they can get substantial gains even for investments much lower than what they usually did. In fact, plenty of successful traders gain thousands of dollars from oil trading. Some might prefer to trade oil futures with a contract so they could speculate on the prices, whether it drops or rises. But, remember that trading oil requires the right set of skills, knowledge of the oil price market and how it moves, as well as the ability to deal with the risk.
2. High Demand, Limited Supply
Right now, oil has a very limited supply while not all countries can produce their own oil to fulfill their needs. Currently, there is no substitute that can fully replace oil yet. Although there is renewable energy, it has not yet reached its full potential. This situation benefits oil investors since the price is highly likely to maintain its level. With the right strategy, traders can make the most out of this situation.
3. Liquidity and Leverage
Oil is considered a very liquid asset to trade, which means it's really easy to convert into cash. The oil market is a very active one and trades happen in large volume almost every day. Not to mention, oil CFD is a leveraged financial product. That means traders can amplify their trading power with minimum capital.
4. Easy to Trade
While taking the first steps in oil trading can be a little bit complicated, it is still one of the easiest assets to trade compared to any other financial product due to its high liquidity. The key is to understand the fundamental matters that drive oil prices. Once traders get the hang of it, it will be easier to understand the price movements. Obviously, having a great broker and adequate knowledge help make it easier.
The Bottom Line
Trading crude oil is more affordable with a broker that offers a low-spread oil trading service. While oil trading in itself is easy, it does require good knowledge of the commodity's fundamentals. First of all, traders should learn what moves crude oils in order to create the best strategy. Another thing is that they have to be able to learn long-term charts. This can help traders understand the historic price of crude oils to perceive the trend pattern of oil's price movement.