Crude oil is one of the most actively traded commodities in the world. However, the energy sector is extremely volatile and many market participants fail to capitalize on fluctuating crude oil prices. This is either because they are not aware of the hidden pitfalls or they rely less on technical analysis & price charts and more on fundamental factors and geopolitical influences, etc.
This Article will explain how crude oil forecasts based on technical analysis can be helpful for investors and traders and how it allows informed decisions to be made.
Price Charts Are A Valuable Source
A forecast based on technical analysis tells us the direction and strength of trend, including key support and resistance levels. This data can be used to gather valuable information that helps the traders and other market participants to make informed decisions.
On the other hand, if you use other sources that offer general data on price movements, fundamental factors, and geopolitical influences, they may not be as effective. Mostly, this information is a speculation on how current fundamentals and other external factors may affect prices over the long-term. Fundamentals and other factors change over time and often these changes occur before the information becomes public. Therefore, in the shorter-term, price charts are more reliable sources because they reflect what the market knows about itself.
Technical Analysis Facilitates Gauging Strength OF Trend
When trading energy commodities like crude oil and natural gas if one can find out a way to gauge the probable direction of the price one is more likely to arrive at the right decision. Seasoned professionals with great understanding of crude oil or natural gas may get it right occasionally. However, they don’t always have a reliable way to predict the strength of a move and whether a trend will continue. However, by using energy price forecasts based on technical analysis their chances of getting it right increase.
Conclusion
Crude oil forecast based on technical analysis can lead to better trade decisions and hence becomes a useful source of information that can be used to mitigate risk and make crude oil trading more profitable.
