Oil price investing scares many traders off. It seems too volatile and unpredictable, so they invest in what they consider “safer” securities.
You can do better.
I’ve made oil investing my life’s work through Energy Advantage and other publications. I’m focused on helping people identify trades that can help them profit nine times or more off their initial investments.
If that sounds too good to be true, consider that I’ve done it many times, and so have my subscribers. There are many ways to profit from oil price investing, but before you jump in with both feet, get the facts.
I’m Dr. Kent Moors, and today, I’m sharing with you 10 things you need to know before you try oil price investing.
1. Volatility Makes Oil Price Investing an Exciting Way to Trade
Some people fear volatility, but I relish it. When a stock price becomes volatile, it presents more opportunities to make money.
Think about it. If a stock price doesn’t move much between support and resistance, you can only make — or lose — a few dollars here and there. That makes it feel safe, but it’s also not a good place to park your cash.
When stock price movements begin to break resistance, though, profits become unlimited. Major events in the oil industry or new announcements from an oil company can send stock prices into huge breakouts, and that’s where I — and my subscribers — make money.
Yes, volatility can cause you to lose money. There’s no such thing as a sure investment. If someone tries to sell you that line, run away fast.
With the right resources, such as Energy Advantage, you reduce your chances of losing cash on oil price investing.
2. You Can Try Paper Trading First
If you’re worried about your lack of knowledge hurting your chances of profiting from oil investing, consider paper trading first. Sites like StocksToTrade enable you to trade on paper without risking your cash, but it’s a double-edged sword.
Paper trading removes the risk from gaining experience. You’re executing trades without any cash behind them, so you don’t profit when you exit a position. Of course, you don’t lose money, either.
The problem is that paper trading can only simulate actual trading. People are often less risk-averse when they’re not putting actual money on the line, so they act differently when they start trading for real.
If you’re interested in oil price investing, set a time limit for paper trading, such as two weeks. Once that time expires, move to real trading. Use your practice time to familiarize yourself with the process, but don’t get mired in it.
And while you’re paper trading, pretend like you’re putting real green behind your oil investing.
3. There’s No Reason to Bet Your Whole Trading Account on One Trade
One of the factors that pulls people away from oil price investing is the thought of putting their life savings on the line. There’s absolutely no reason to do that.
Maybe you fund your trading account with $1,000. You don’t have to put that $1,000 into a single trade. In fact, you don’t have to trade with your whole account at all.
Let’s say that you’re reasonably sure a stock with a current price of $20 will shoot up to $30 over the next couple days. You could buy 25 shares of that stock for $500, which is half your trading account. If the stock price moves how you anticipate, you’ll sell at $30 for a $250 profit.
That’s not a huge win, but it’s nothing to sneeze at, either. As your trading account grows and you gain more confidence, you can take out larger positions in single stocks or diversify among multiple stocks.
4. Numerous Catalysts Can Impact Oil Prices
Oil investing is exciting for me because so many catalysts can impact prices. Consider last year, when Hurricane Harvey blasted the Texas coast. It brought crude oil production to a virtual halt and prevented ships from exiting the Houston ports.
Natural disasters can influence oil prices in huge ways, and while we don’t wish such catastrophes on anyone, we still want to know how those disasters impact the market.
The same thing goes for any form of fundamental analysis. Companies in the oil industry often panic when oil prices go down. They lay off huge portions of their workforces and even shut down entire departments. Then, when oil prices climb, they swing in the other direction.
Since all of these catalysts can impact oil investing, knowing what stock prices will do as a result makes you a better, more knowledgeable investor. Best of all, if you’re part of Energy Advantage or my Inner Circle, you don’t have to track these events yourself. But more on that later.
5. Oil Investing Doesn’t Require an Understanding of Crude Oil
Do you know or care how crude oil is made? No? There’s nothing wrong with that.
I’ve spent my career learning as much as I can about the energy sector, but not everyone possesses my degree of interest on the subject. That’s why I set up my publications — so I can alert subscribers to potentially lucrative trades they wouldn’t have discovered by themselves.
The stock market doesn’t always reflect crude oil prices, anyway. Too many other factors contribute to stock price movements, as mentioned above.
6. You Don’t Need to Buy Actual Crude Oil
Similarly, you don’t have to buy actual crude oil to give oil price investing a shot. People tend to picture warehouses full of dirty, oil-encrusted barrels, but that’s not typical for your average investor.
It’s true that, in the past, commodities investors would collect actual oil, gold, silver, precious metals, and other natural commodities, then sell them at higher prices in the future. Now that we have exchanges, though, actual commodities don’t need to change hands.
If you’re worried about where you’re going to fit the barrels in your garage, stop. My strategies are far more efficient — and don’t get you a threatening letter from your homeowners’ association because of the oil stains on your driveway.
7. Oil Price Investing Doesn’t Have to Involve Long-Term Investments
Let’s separate investing and trading. I’m using the term oil price investing because it’s easy to understand, but the transactions I recommend usually involve trading instead. In other words, you’re entering and exiting a position quickly.
Sure, you can hold onto a few thousand shares of BP for 20 years and generate a profit, but who wants to wait two decades to get their hands on cash? Long-term investments are part of a diverse and healthy portfolio, but trading allows you to generate immediate income instead.
8. Small Companies Can Yield Tremendous Profit
Speaking of BP, it’s the major oil companies people picture when they think about oil investing. There’s nothing wrong with buying shares of Shell and Exxon, but much smaller companies often yield the greatest profits in the stock market.
I often send out trade alerts that involve companies you’ve never heard of. They’re not influencing the global energy sector, but their stocks have the power to put more cash in your pocket.
9. You Can’t Profit From Oil Investing Unless You Trade
Here’s the thing: You can think about oil price investing for the next 10 years. That won’t make you any money. Unless you actually trade stocks, you’re missing opportunities.
I meet people all the time who mean to get around to oil investing, but never actually open a trading account. They’re not serious about generating income for themselves and their families. Either that, or they think it’s too big of a risk.
The problem is that you can make money through oil investing. It starts when you act.
10. There Are Plenty of Resources at Your Disposal, Including Energy Advantage
Every day, I help my Energy Advantage subscribers boost their income through oil price investing. I also have other publications to assist you in avoiding mistakes and capitalizing on tremendous opportunities for profits.
In other words, I do a lot of the work for you. Instead of burying your nose in stock charts and fundamental reports, you can simply wait to hear from me.
Investing is always scary for people who have never tried it. Maybe you have a managed 401(k) or IRA that someone else handles for you, but it’s not the same thing.
Trading securities means executing your own transactions through a trading account. And if you have an expert in your corner, you’re far more likely to succeed.
If you’re interested in oil investing, now’s the time to get your feet wet. Remember, you can’t make money through paper trading or considering a potential investment. Get the scoop on oil price investing directly from me so you don’t have to spend hours on research.