How do you trade Natural Gas?

Valuestrats920 said:
What is your basis for saying that their overall position is negative? I know lots of EDF Traders and I would not say they are not skilled or that it is not their core business.
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Because my PhD research is on hedgers and speculators on Commodity Crude oil futures market. Consistent with previous studies, I also have found that hedgers' overall daily return is significantly negative at 1 percent level. I use Thomson Reuters tick history data from 1996 to 2015, millisecond data. Besides hedgers show consistent cognitive limitation in terms of evaluating price. They initiate a lot of buys when prices fall from $100.00 to $99.99, thinking that a penny fall is substantially large. Any strategy based on static number, or based on psychological factors will not produce a good outcome.

If they hold their positions for longer period with asymmetry information, then they might have a chance...but it's not only me who have found that their overall performance is significantly negative.
 
Valuestrats920 said:
How are these guys still trading if they aren't profitable?
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Good question indeed! I think perhaps they have to pay for the cost of hedge.

victorycountry said:
Because my PhD research is on hedgers and speculators on Commodity Crude oil futures market. Consistent with previous studies, I also have found that hedgers' overall daily return is significantly negative at 1 percent level. I use Thomson Reuters tick history data from 1996 to 2015, millisecond data. Besides hedgers show consistent cognitive limitation in terms of evaluating price. They initiate a lot of buys when prices fall from $100.00 to $99.99, thinking that a penny fall is substantially large. Any strategy based on static number, or based on psychological factors will not produce a good outcome.

If they hold their positions for longer period with asymmetry information, then they might have a chance...but it's not only me who have found that their overall performance is significantly negative.
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Negative 1% daily? Truly significant!

Any data source for reference?

How much or what % they earn annually, in general, net gain after hedge cost?
 
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Sorry guys no time for this. I am really a busy person. Especially, one doesn't seem to understand the function of futures market. Another doesn't seem to understand the statistical terminologies
 
victorycountry said:
...Consistent with previous studies, I also have found that hedgers' overall daily return is significantly negative at 1 percent level ...
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I thought hedgers were closing their positions as EFP's. In this case, I would think that calculating a daily return or P&L as if they were speculating is not appropriate. Am I completely off base here?
 
Trader13 said:
I thought hedgers were closing their positions as EFP's. In this case, I would think that calculating a daily return or P&L as if they were speculating is not appropriate. Am I completely off base here?
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Hedgers are commercial traders - they do to minimise price risk (price fluctuation) and that's is the primary reason why futures market is established. There are many kind of commercial traders e.g. farmers, swap banks, etc...some study, yes research on Forex do suggest that banks do make profit because they suggest that banks have superior asymmetry information through their client orders. But I doubt it. Banks do not have skilled traders and they do not do research. But Hedge funds (speculators) do and they are the one who carry out ongoing research and have skilled people. As far as hedgers (commercial traders)' profitability in commodity futures is concerned, speculators make consistent profits by providing liquidity but they won't hold their position for long because the impact of non-information motivated trading is always temporary.

How many people in banks or non-hedge fund companies do you think they know about this? one or two? maybe? besides, this is only one aspect of markets. Just because you know that US dollar will appreciate in the near future because of the change in interest rate does not make you millionaire next day. You need to know the right market timing etc
 
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weather.png
Overnight said:
You're out of your fucking mind. Where do you live? Hawaii?
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lol upstate, and more warm weather forecast for coming days.. 50's

this is extremely warm weather for us at this time of year.
 
victorycountry said:
Because my PhD research is on hedgers and speculators on Commodity Crude oil futures market. Consistent with previous studies, I also have found that hedgers' overall daily return is significantly negative at 1 percent level. I use Thomson Reuters tick history data from 1996 to 2015, millisecond data. Besides hedgers show consistent cognitive limitation in terms of evaluating price. They initiate a lot of buys when prices fall from $100.00 to $99.99, thinking that a penny fall is substantially large. Any strategy based on static number, or based on psychological factors will not produce a good outcome.

If they hold their positions for longer period with asymmetry information, then they might have a chance...but it's not only me who have found that their overall performance is significantly negative.
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Lol, phd research.
 
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