Oil Forex Broker

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What’s the connection here you may ask? Surely you can’t trade oil through a Forex broker. Well the answer is yes you can. A number of Forex brokers offer access to the commodities markets via their standard interfaces.

But why would you want to trade oil anyway? Well it can’t have escaped your attention that the commodities and Forex markets are closely linked. When the oil price goes up oil producing countries like Canada can profit whilst oil importing countries like Japan suffer.

I chose these two countries specifically because both currency pairs Japanese Yen (JPY) and Canadian Dollar (CAD) are heavily influenced by fluctuations in oil price. In the same way the Australian Dollar (AUD) is affected by the price of gold.

If the oil price goes up the Canadian Dollar will rise against the USD and JPY because both countries import large quantities of Canadian Oil. You might be surprised to learn that Canada has the second largest oil reserves in the world after Saudi Arabia.

This creates an opportunity for astute investors, trading both currencies and oil. You can make money from both the rising price of oil and the rising value of the Canadian Dollar against the USD and JPY.

If you want to try out this strategy you need to keep an eye on the price of oil as the currency markets always follow fluctuations in the oil price. Don’t make the mistake of following currency prices and then start trading oil because you’ll always be trailing the market.

One other thing to say about this strategy is that many different things affect currency prices. The USD can be affected just as much by a political crisis as it can by the price of oil so don’t go thinking this system is the Holly Grail because it isn’t.

But the Canadian Dollar (CAD) and the Japanese Yen (JPY) are good places to start as both currencies are heavily influenced by movements in the price of oil. With a little research you’ll soon be able to develop a nice little profitable strategy watching oil price movements and placing corresponding trades in the Forex market.

OK so that’s why you might be interested, but which Forex broker is the best bet for trading oil. Well if you’ve never traded oil before you need to learn as much as you can before you start risking any real money.

For situations like this I always recommend eToro. They have an excellent trading community that lets you follow along with more experienced traders. So all you have to do is find a trader that trades oil profitably and watch when he enters and exits the market.

Match this up with oil price movements and mimic his trades on eToro’s virtual platform. Soon you’ll have a thorough understanding of the market and be able to construct your own trades based on oil price movements and be another step closer to retirement.

Sign-up for an account with eToro and start building your oil trading strategy today.

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