How you can start energy trading today

Johannesburg, 26 Apr 2024
Energy trading is a goldmine.
Energy trading is a goldmine.

Have you ever dreamed of making huge money from trading commodities like oil, gas and electricity? You might think: "There's no way an ordinary person like me could ever get into that intense energy trading game." Well, you can!

You're about to get the full breakdown on why energy trading is such a lucrative goldmine, plus a step-by-step plan for how to start as a total beginner. Here is how it works:

Why energy trading is a moneymaking goldmine

The core reason energy trading carries such insane profit potential comes down to one simple key word: Demand. As in, the entire world's never-ending, increasing demand for energy.

Every single nation needs massive amounts of energy flowing 24/7 to power its cities, businesses, homes, vehicles and absolutely everything else in modern life. We're straight-up addicted to energy as a human species!

But here's the kicker – the supply of energy products like crude oil, natural gas, gasoline and electricity can't endlessly increase to match that off-the-charts demand. These energy sources are finite resources with real limits on how much can be produced at any given time.

That supply shortage creates one inevitable outcome: Wild price swings and volatility as the world bids for limited energy. Shortages send prices spiking through the roof. Oversupply causes prices to crash into the gutter.

Market conditions fluctuate all the time

See, trading energy commodities is all about speculating on those future price movements. Will oil prices keep climbing over the next six months or plummet? How about natural gas costs this winter if it's a brutal cold season? Electricity rates during summer heat waves? Gasoline at the pump with more drivers on the roads?

By carefully studying market conditions and deploying smart trading strategies, crafty energy traders can consistently capture profits from those constant price fluctuations across dozens of energy product trading opportunities.

How to start energy trading from scratch today

Let's get into the steps any total beginner can follow to kick-start their energy trading journey!

Step 1: Open an online brokerage account

First things first, you'll need to open an account with a regulated online broker providing direct access to trade energy contracts and derivatives.

Getting approved literally just takes a few minutes to open and fund an account with some starting capital. Many brokers like gas profit offer user-friendly UI and tools for new traders too.

Step 2: Study up on the basics

While online trading platforms have democratised energy markets for the every-person, don't fall into the trap of thinking you can just gamble blindly. Taking time to learn some core foundations first is crucial.

Step 3: Practice for free on simulators

Okay, once you have some energy market knowledge under your belt, it's time to start getting hands-on experience without risking actual capital. This is where those free demo trading simulators come in.

Step 4: Start with tiny trades

Once you've developed a solid energy trading strategy through practice and feel ready to handle the psychological pressures, it's time to start making real money trades. But for now, keep position sizes tiny.

Step 5: Manage risk

Speaking of risk management, this is the most critical pillar separating profitable energy traders from losers giving back all those juicy profits. Even with a brilliant trading strategy, one crazy outsize loss can evaporate all your gains in the blink of an eye. Energy markets can swing so violently, there's no room for reckless bets or ego.

Consistently winning traders keep strict limits on:

  • The % of capital risk per trade (ex: 1%-2% max).
  • Setting tight stop-loss and profit-taking exit points.
  • Never over-leveraging or using too much margin.
  • Diversifying across different energy products.

Always protect that principal investment at all costs for maximum gas profit! It takes years of patience and discipline to grow a trading fund responsibly.

Step 6: Gradually increase size

As you keep executing your trading process with consistency over months and years, earning respectable profits at those smallest trade sizes, you can start ramping up position allocations.

Ambitious energy traders may target risking up to 5% or even 10% of capital on each trade eventually. But again, only after repeatedly proving mastery of proper risk management first! This is a gradual progression. There's no need to rush for gas profit, it rolls in with time!

Step 7: Continuously study and refine

Maintaining a beginners mindset of perpetual learning is another indispensable mindset of successful career energy traders. None of them rest on their laurels or think they have all the answers.

Markets are continuously shifting based on new technologies, policies, world events and fundamentals. Strategies that worked seamlessly in the past can suddenly stop working. So continue studying, workshopping, refining your approach!

Connect with mentors and energy trading chat rooms. Break down past trades that worked and ones that didn't. Always be a hungry student of the game ready to keep levelling up.

In conclusion

While the upside potential is indeed life-changing wealth if you can reach the top trader levels, the other brilliant aspect of getting into energy trading is how you can take things as far (or not!) as you desire.

But if your goals are more modest, like just creating a nice additional income stream on the side of your regular job? Or maybe you'd be content capturing enough profits for an annual vacation fund? Energy trading can deliver that too, simply based on the effort and time commitment.

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