You predict that you "feel" the odds, and you predict your "following" others are both potentially profitable!?
How do you trade Natural Gas?
- Thread starter OctopodeClub
- Start date
You predict that you "feel" the odds, and you predict your "following" others are both potentially profitable!?
Haven't been able to come up with a strategy to trade the front month of NG. Seems totally random.
One thing I did notice looking at the charts. Smooth price moves seemed to happen most frequently overnight Tues and Thurs.
CL seems to make much more obvious trends so I'm trading that instead.
One thing I did notice looking at the charts. Smooth price moves seemed to happen most frequently overnight Tues and Thurs.
CL seems to make much more obvious trends so I'm trading that instead.
Do you utilize any of the more widely use models (ie GPCM, INGM) for your own model?
Nope. I built my own model and use my own data.
Is it as granular as the models? Would you mind sharing your inputs?
Finding unique inputs is a huge edge in a model. I can't share that. I'll be happy to answer general questions about natural gas.
Alright, let me back out to the 5000ft level, maybe you could summarize how you look at natural gas without giving away the 'secret sauce'?
I understand that you trade spreads out on the curve, likely Henry Hub, which is a delivery point for a dozen or so pipelines, all of which have their own inputs. The obvious inputs to the curve would be supply, driven by production and storage, and demand which is largely driven by weather hence the curve's seasonality. Changes to the curve would be caused by unseasonable weather, unexpected changes to production & storage, and unexpected changes to transmission.
I'm kind of rambling, but my question would be how do you put all of this together? Are you modeling price or its reaction to changes of these inputs? Both? I feel like I ended up closer to the 500ft level by the end of this post.
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Mr Mickey, good points; are you saying the WSJ [ Wall Street Journal] is wrong, for using '''betting when they mean trading- investing'' LOL?? Sounds like you are; I am saying the WSJ is wrong 2.LOL.
I do believe that-a quart of wheat will cost a days pay, 3 quarts of barley will cost a days pay..... Rev 6 KJV,NET version.
I used to , as a teen ,gamble for quarter dollars[$00.25], playing pool. Stock commissions were way to hi to trade.So that is why some watch quarter levels in markets ?? LOL Interesting they call it weather forecasting; NOT weather predicting LOL. Some say nat gas is gambling ; no, but it can go/trend from $14.0 to 1.40.LOL[Edit Thanks Mickey; Farmers Almanac noted their forecast of weather is about 80% accurate]
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Not wishing to hijack this good thread but sure, CORRECT trading is more about betting than predicting.
If you know how to play your cards, placing trades is a calculated gamble, your experience tell you that probabilities are in your favour, or worded another way, you are prepared to accept the inherent risks in front of you because you can control your losses knowing that positive payoffs could possibly be unlimited.
When I trade I'm not predicting anything, there is a fork in the road ahead, one leads down over the cliff therefore apply brake, the other fork of the road leads into a fishing hole full of tasty salmon, therefore I will catch as many as possible until they swim off.