The world of finance is rapidly embracing artificial intelligence (AI). This technology, once relegated to science fiction, is now being used to analyse vast amounts of data and identify trading opportunities in the forex market.

For traders, AI offers exciting possibilities for faster analysis, automation, and potentially, improved profitability.

However, it’s crucial to understand that AI is a tool, not a magic formula. This guide will equip you with the knowledge to leverage AI responsibly and effectively in your trading strategy.

Understanding AI in trading

Before diving into how AI can assist you, let’s break down the basics. AI refers to machines that can simulate human intelligence, particularly the ability to learn and improve from data.

In the context of trading, AI utilises two main techniques: machine learning and deep learning.

Machine learning algorithms “learn” from historical data, identifying patterns and relationships that might not be obvious to human analysts. Deep learning builds upon this by using complex neural networks to analyse even more intricate data sets.

Both techniques allow AI to constantly evolve and improve its ability to identify trading opportunities.

Algorithmic trading

This involves using AI algorithms to automate the trading process. The algorithm analyses market data according to pre-programmed instructions and executes trades based on its findings.

Here’s an example: An algorithmic trading strategy could be programmed to identify and capitalise on breakout trades. The AI would analyse historical price data and identify instances where the price breaks above or below a certain resistance or support level with significant volume.

If this pattern is detected, the algorithm could automatically execute a buy order (for breakouts above resistance) or a sell order (for breakouts below support). However, relying solely on algorithms can be risky, as unforeseen market events can lead to significant losses.

AI trading signals

Don’t want to fully automate your trading?  AI can still be a valuable tool. AI-powered platforms can generate trade signals based on market analysis.  These signals can act as confirmation for your own analysis or help you identify potential entry and exit points for trades.

Let’s say you are a technical analyst who uses moving averages to identify trends. An AI tool could analyse various technical indicators alongside the moving averages and generate buy signals when multiple indicators align with a potential uptrend.

Remember, these are just signals, not guaranteed winners. Always conduct your own research and understand the rationale behind the signal before acting.

Technical analysis with AI

Technical analysts rely on historical price data and chart patterns to forecast future price movements. AI can take this analysis to a whole new level. By analysing vast amounts of historical data, AI can identify complex technical patterns that might be difficult for humans to spot.

For example, AI could be used to identify recurring candlestick reversal patterns with a higher-than-average success rate. This information could then be incorporated into your technical analysis strategy to help you identify potential turning points in the market.

Sentiment analysis

News and social media can have a significant impact on market sentiment. AI can analyse this data to gauge the overall mood of the market. By understanding whether the sentiment is bullish (optimistic) or bearish (pessimistic), traders can make more informed decisions about their positions.

Imagine a scenario where a major central bank announces a dovish (expansionary) monetary policy decision. AI could analyse social media sentiment and news articles to gauge the overall market reaction.

If the sentiment is overwhelmingly positive, an AI tool could suggest opening long positions on currencies that might benefit from the dovish policy. However, it’s important to remember that sentiment analysis is just one piece of the puzzle, and unforeseen events can quickly change market direction.

Implementing AI into your trading strategy

Before you jump in and start using AI for every trade, it’s important to have a plan. Here’s how to integrate AI into your trading strategy responsibly:

1. Define your trading goals: The first step is to identify your risk tolerance and desired level of involvement. Are you a passive trader looking for minimal effort, or an active trader who enjoys in-depth analysis?  Understanding your goals will help you choose the right AI tool and determine how much reliance to place on its signals.

2. Start with backtesting: Not all AI tools are created equal. Before committing real capital, choose a tool that allows historical data testing (backtesting). This lets you see how the AI would have performed on past market data. Evaluate the tool’s performance and identify any recurring strengths or weaknesses.

3. Integrate with your trading platform: Ensure the AI tool you choose is compatible with your existing trading platform. This will allow for seamless signal delivery and potentially even automated trade execution. Look for tools that offer data feed integration, so signals are delivered directly to your platform.

4. Start small and gradually increase reliance: Don’t go all-in on AI right away. Begin by using AI-generated signals as confirmation for your own analysis or to identify potential entry/exit points. As you gain confidence and experience with the tool, you can gradually increase your trust in its suggestions. Remember, the final decision should always be yours.

5. Maintain oversight and control: AI is a powerful tool, but it’s not a replacement for your own knowledge and judgment. Never rely solely on AI signals. Always conduct your own research, understand the reasoning behind each trade, and maintain control over your trading decisions. Use AI as a complementary tool to enhance your analysis, not as an automated path to riches.

In conclusion, AI has the potential to revolutionise forex trading, offering faster analysis, automation possibilities, and potentially improved profitability. However, it’s crucial to approach AI with a clear understanding of its limitations. By using AI responsibly as a tool to enhance your trading strategy, while maintaining your own knowledge and risk management practices, you can leverage the power of AI to potentially improve your trading experience.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

The oil & gas industry is a cornerstone of the global economy, with its health directly impacting currency markets. As a forex trader, understanding the trends within this industry can be crucial for making informed trading decisions. This article explores the key factors shaping the oil and gas landscape in 2024, providing valuable insights for traders.

Demand and supply dynamics

The global oil market is currently experiencing a tug-of-war between rising demand and restricted supply.

On the demand side, a post-pandemic economic rebound is expected to drive a modest increase of 1.1 million barrels per day (mb/d) in oil consumption in 2024. This growth is particularly fuelled by developing economies like China and India, where rising industrial activity is expected to lead to increased reliance on oil.

However, this positive demand outlook is countered by significant production cuts from the Organisation of the Petroleum Exporting Countries and allies (OPEC+). These cuts, amounting to around 1.5 million barrels per day, have been a major reason behind the 2023 surge in oil prices.

While US shale oil production is estimated to climb by 0.8 million barrels per day in 2024, it’s unlikely to fully offset the cuts from OPEC+, keeping a floor under prices in the near term. It’s important to note that a potential increase in supply from OPEC+ exceeding pre-pandemic levels in 2025 could significantly impact the price equation.

Real oil and gas demand and supply in 2024

Let’s take a look at the latest data from the International Energy Agency’s (IEA) March 2024 Oil Market Report.

In a positive surprise, global oil demand is forecast to rise by a higher-than-expected 1.7 million barrels per day (mb/d) in the first quarter of 2024 (1Q24). This upward revision is attributed to an improved economic outlook for the United States and increased bunkering activity (fuelling ships).

However, the IEA still expects overall demand growth to slow throughout the year, from 2.3 mb/d in 2023 to a revised estimate of 1.3 mb/d in 2024.

World oil production is projected to fall by 870 kb/d in 1Q24 compared to 4Q23. This decline is due to heavy weather-related shutdowns and new production curbs implemented by the OPEC+ alliance. Despite the initial drop, OPEC+ production is still expected to increase in 2024, albeit at a downwardly revised rate of 400 kb/d.

With the revised forecasts, global oil stocks are now expected to increase by 800 kb/d to 102.9 mb/d in 2024. This indicates a potential rise in global oil inventories throughout the year.

Price outlook & market volatility

Oil prices have experienced a significant climb in recent times, hovering around $90 per barrel compared to the lows of $60 per barrel seen in 2020. Due to the current supply-demand imbalance, analysts initially expected prices to remain elevated throughout 2024, with a potential reach of $100 per barrel.

However, a more nuanced picture is emerging. As of May 22nd, 2024, the price of West Texas Intermediate (WTI) crude oil sits at $77.91 per barrel according to Macrotrends. This suggests a price increase of around 9% for 2024 so far, with significant volatility throughout the year. The highs have reached $87.01 per barrel, but prices have also dipped as low as $70.38 per barrel.

Unforeseen circumstances can significantly impact prices. A global economic downturn could decrease demand and lead to a price correction. Conversely, major oil discoveries or disruptions in supply due to geopolitical events could cause prices to surge. Closely monitoring these developments remains crucial for traders navigating the oil market.

While the initial forecasts anticipated prices reaching $100 per barrel, current market conditions suggest a more moderate price range with ongoing volatility.

Industry trends & long-term outlook

Beyond the immediate price dynamics, several key trends are shaping the long-term outlook of the oil & gas industry.

Firstly, there’s a rising tide of mergers and acquisitions (M&A) activity. Strong cash flows, buoyed by high oil prices, and renewed investor confidence are driving this trend. Industry experts predict a 20% increase in M&A deals in 2024 compared to 2023, as companies consolidate to gain market share and improve operational efficiencies.

This consolidation could also lead to increased bargaining power with service providers, potentially impacting the overall cost structure of the industry.

Secondly, decarbonisation efforts are gaining significant traction. Oil and gas companies are increasingly investing in carbon capture technologies, with a projected global market size of $8.6 billion by 2025. These technologies aim to capture carbon emissions from power plants and industrial facilities, preventing them from entering the atmosphere.

Additionally, hydrogen production, a clean-burning alternative fuel, is attracting significant investments, with a projected market value of $18 billion by 2024. This focus on sustainability could influence long-term demand for traditional oil and gas.

While the transition to a low-carbon economy may take time, it’s a trend that traders should be aware of, as it could have a significant impact on the industry’s future.

Finally, advancements in technologies like generative AI are playing a role in optimising exploration, production, and logistics. These advancements are estimated to unlock an additional 5% of global oil reserves and could potentially lead to increased efficiency and cost reductions within the industry.

AI can be used for tasks like analysing seismic data to identify potential drilling sites, optimising well placement, and even predicting equipment maintenance needs. By leveraging these technologies, oil and gas companies can potentially operate with greater efficiency and profitability, even in a lower-carbon future.

In conclusion, the oil and gas industry in 2024 presents a complex landscape for forex CFD traders. Understanding the interplay between demand, supply, industry trends, and potential geopolitical disruptions is crucial for making informed trading decisions. By staying updated on market developments, employing technical analysis effectively, and maintaining a disciplined risk management approach, traders can navigate the oil market with greater confidence.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

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The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.