Oil Account Explanation - 2 Types of Oil Trading Accounts
In recent years retail oil has grown hugely in popularity & the demand for different types of crude oil trading accounts has also grown. There are many different oil account types available to any oil trader who wants to trade and participate in the online oil market.
The oil market is a highly leveraged market for speculating on crude oil instrument valuations. Oil traders can purchase large amounts of oil units using leverage - Oil Trading Leverage is what makes oil trading attractive to many online oil traders - with oil leverage a oil trader can make more profits or losses because they use less of their capital & borrow the rest.
There are different types of oil accounts available to help investors better manage their oil account capital as well as their oil trade transactions.
How a Real Oil Account Looks Like
It is therefore important that the oil traders consider what they want to get out of their oil trading, before deciding on the crude oil trading account type to open.
Shown Below is a comparison of the two types of oil accounts commonly used to trade crude oil. The oil account types review below explains the different features of each of the two types of oil accounts.
Standard Oil Trading Accounts Types Explained
Oil Account Explanation - Standard Oil Trading Account. A Standard Crude Oil Trading Account is denominated in US Dollars and oil trade transactions are placed using standard lots. One lot is also known as one contract. Minimum opening capital – at least $10,000 USD.
1 contract refers to the minimum size of a single oil trade transaction. This oil account option is the most suitable for oil traders with enough capital to invest in oil - this oil account option requires $10,000 to $50,000 dollars in starting capital, For this standard oil account the oil trader will not be undercapitalized and with good crude oil money management trading rules and oil money management strategies, this standard oil account option has the best chance for profitability because it is not undercapitalized. Under capitalization is what makes most oil traders in oil not profitable.
It isn't recommended to open a standard oil account unless you have an account balance of at between $10,000 minimum and $50,000.
Professional Money Managers recommend $50,000 Dollars minimum to open this standard oil account and only opening trades with only 2% of the trading capital you have in your oil account. However, most online oil brokers will still open this standard oil account for you if you have more than $10,000.
With oil leverage of 100:1, you will borrow from your oil broker (with oil leverage of 100:1, your oil broker gives you $100 dollars for every $1 dollar that you have in your oil account, therefore if you have $1,000, the oil broker will give you $100 dollars of oil leverage for every $1 dollar you've, meaning after oil leverage you will have $1,000*100=$100,000 which you can then use to trade crude oil).
Micro Oil Trading Accounts Types Explained
Oil Account Explanation - Micro Crude Oil Trading Account. Micro Oil Trading Accounts use lot sizes of only equivalent one-hundredth that of a oil standard lot. These Micro oil accounts are often appropriate for oil traders without a lot of oil capital and can sometimes be opened with only a $5 minimum balance.
This Micro oil account option allows the oil trader to open trades in micro lots. 1 oil micro lot is one-tenth of a oil mini lot and one-hundredth of a oil standard lot.
This Micro oil account option is generally best suited for oil account equity balances that are between $1,000 and $5,000
In oil trading, one oil standard lot is the standard transaction minimum of a given oil instrument traded in the crude oil market. But many oil brokers offer fractions of this oil standard lot to enable more retail crude oil traders to access the crude oil market. Being able to offer oil micro lots reduces the minimum oil trade transaction size thus giving the oil beginner traders and also those oil retail traders without a lot of oil capital to start trading and get a feel of the oil market without investing a lot of oil capital.
There are learn oil online tutorials that a oil trader can read even before opening a real oil account, and to get extra practice in oil trading before opening a real oil account a beginner oil trader should open a practice Oil practice trading account with a oil broker - so as to practice placing oil trade transactions & also learn about the oil trading platform software before opening a real oil account and investing with real money.
During the oil training period a beginner trader will be using the oil demo practice trading account, the beginner oil trader will learn the key factors needed to succeed in oil such as: oil trading bascis education, oil money management rule, oil plan and oil trading systems.
The types of oil trading strategies used and the skills required for any of these 2 oil accounts are essentially the same - those oil skills and oil strategies required for the Standard oil account or Micro oil account are the same the only difference to be adjusted are the crude oil money management trading rules for each oil account type.
