CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing all your money. Read our full Risk Warning.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

How to Trade Brent Crude Oil CFDs Without Experience

Filip Dimkovski - Writer for Fortrade
By Filip Dimkovski
Joel Taylor - Editor for Fortrade
Edited by Joel Taylor

Updated November 21, 2023.

Oil barrels in front of a stock graph on a white background

Trading Brent crude oil CFDs can be quite intimidating, especially if you have never done it before. This is because the oil market is known for being one of the most volatile markets out there, making it a possibility for traders to potentially turn a profit. However, it can also be risky, so having the right tools and strategies is essential.

Of course, trading oil in a traditional way is difficult, which is why we now have CFDs. This means that there's no need to handle physical contracts or invest in a physical asset, and you can trade with the price difference between opening and closing prices without actually owning instruments.

So, if you're ready to take the plunge and learn how to trade Brent crude oil CFDs without experience, read on. We'll cover everything you need to know, from the basics to strategies and tips.

Trading Brent Crude Oil CFDs

Trading Brent crude oil through CFDs is often commission-free, with brokerages making a small profit from the spread. It sounds simple enough, but for beginners, it can be quite overwhelming. To help, we have broken down trading Brent crude oil CFDs into four steps:

  1. Sign up for an account with a CFD trading platform As a beginner, it's important to choose one that offers a wide range of tools and resources. Also, make sure to read the terms and conditions of the brokerage carefully before you commit to it.
  2. Download and install the trading platform on your device This can be a mobile app, desktop app, or even a web-based platform, depending on what the brokerage offers.
  3. Deposit funds into your account This can be done through a variety of methods, including credit cards, bank transfers, and e-wallets.
  4. Start opening and closing trades from the trading platform You can choose to open long or short positions, depending on whether you think the price of Brent crude oil will go up or down.

Of course, there is much more to learn before you can trade confidently—like the basics of CFD trading, as well as some strategies and tips to help you make trades.

» Read more about trading crude oil CFDs in volatile markets

What Affects the Potential of Brent Crude Oil CFDs?

When trading Brent crude oil CFDs, there are several factors that can affect the outcome. These include:

  • Supply and demand are particularly important when it comes to Brent crude oil. When demand exceeds supply, prices tend to increase. Conversely, if supply is higher than demand, prices tend to decrease.
  • Political and economic events will also play a role in the price direction of Brent crude oil. For instance, news of trade agreements or major conflicts, such as the one in Ukraine, can have a direct effect on the price.
  • The seasonality of supply and demand is also important to consider. For example, in winter months, demand for oil is usually higher, which causes prices to increase.
  • Finally, speculation plays a crucial role in the price movement of Brent crude oil. Traders can use technical analysis tools, like support and resistance levels, to try and predict the future direction of prices, though there's no way to guarantee success.

It's worth mentioning that the cost of trading Brent crude oil CFDs can also vary depending on the type of brokerage you choose, as well as the amount of leverage you use. Of course, all of these factors can have a big effect on the potential of your trades, so it's important to monitor them closely.

Things to Know Before You Start

Before you start trading Brent crude oil CFDs, it's important to do your research and be aware of the risks involved. To get a sense of how CFD trading works, you need to understand the following:

  • The size of the trade CFD trades are measured in lots, which are units of the underlying asset. The size of a lot will depend on the type of CFD you are trading, as well as the leverage offered by the brokerage. In most cases, the standard lot in Brent crude oil trading is 100 barrels.
  • The trading costs These include costs charged by CFD brokerages, like spreads, commissions, and swaps. So, before you start trading, make sure you know what kind of fees you will be charged for each trade.
  • The difference between the opening and closing price of the trade When you open a trade, the price of Brent crude oil will be your entry point. On the other hand, when you close the trade, the exit point is determined by the current market price. The difference between these two points is your potential profit or loss.

It is also important to practice proper risk management when trading CFDs. Setting stop-losses and take-profits prior to entering a trade will help you minimize losses in the event that prices move unexpectedly against your predictions.

» Find out more about trading commodities with Fortrade

Key Takeaway

We can conclude that trading Brent crude oil CFDs may earn a potential profit, but it's important to understand the risks involved before you start.

So, make sure to do your research, understand the different factors that can affect oil prices, and read the terms and conditions of your brokerage carefully. By following these steps, you can potentially improve your trading experience.