Total newbie looking start energy trading. Please help

tqt1985 · Jan 19, 2015

Hello everyone,

Thank you for taking your time to read this. A buddy of mine suggested that I should try and get a position as a hourly energy trading with one of the firms in Houston. To be perfectly honest, I find it very fascinating, but I'm completely clueless when it comes to energy trading. I was wondering if it is possible to trade on the same market as those firms and where should I go to get started. My goal is to get exposure to the markets and see how it works as a retail trader. Thank you in advance and please excuse me for my ignorant. Your help is greatly appreciated.

IAS_LLC · Jan 19, 2015

I'm not sure which firms you are referring to, but odds are they are trading NYMEX futures. Not trying to be negative, but if you have to ask that question odds are no-one is going to pay you to trade for them (atleast not with your current knowledge). If this is a long term goal, start by learning about Futures trading. You can open up a brokerage account and trade CL (crude oil futures) or the micro version of the same contract.

tqt1985 · Jan 19, 2015

IAS_LLC said:
I'm not sure which firms you are referring to, but odds are they are trading NYMEX futures. Not trying to be negative, but if you have to ask that question odds are no-one is going to pay you to trade for them (atleast not with your current knowledge). If this is a long term goal, start by learning about Futures trading. You can open up a brokerage account and trade CL (crude oil futures) or the micro version of the same contract.

Thank you for your reply. Yes it is long term ad I know I have a lot of work to do.

xandman · Jan 19, 2015

Opening up a futures account is just scratching the surface. Knowing the oil business gives you a leg up.

Energy trading in Houston is a very sophisticated business. I would say more so than typical Wall Street. ( Yeah, thats bold.) Typical finance curricula, news, research and the web revolves around stocks and bonds. There is a ton of information. As a financial trader, you may or may not have to read the tea leaves of the economic science. But as an energy trader in Houston, you will have to understand the economics and the logistics of the oil business.

Pick up this book from Amazon used for 2 dollars. http://www.amazon.com/Energy-Risk-V...ergy+risk&pebp=1421710918302&peasin=786312319. What I particularly liked about this book is that it acts as a filter for how institutions think vs the stuff you read in best selling retail trading books.

Also, check follow the postings of a guy named ogarbitrage on this forum.

ogarbitrage · Jan 19, 2015

I echo reading Pilipovic. Her works are among the standards in the sector.

bh_prop · Jan 19, 2015

Your friend's recommendation to trade hourly is NOT Nymex futures trading. It is real time physical electricity trading usually on a 12 hr rotating shift which will include weekends and holidays. Sometimes they will hire recent college grads but (as in any field) it certainly helps to have an "in" to the company, i.e. who do you know that knows a hiring manager?

tqt1985 · Jan 20, 2015

bh_prop said:
Your friend's recommendation to trade hourly is NOT Nymex futures trading. It is real time physical electricity trading usually on a 12 hr rotating shift which will include weekends and holidays. Sometimes they will hire recent college grads but (as in any field) it certainly helps to have an "in" to the company, i.e. who do you know that knows a hiring manager?

You are correct sir. I don't know any hiring manager. Do you think it's possible to do the same thing at home or I have to be hired?

bh_prop · Jan 20, 2015

tqt1985 said:
You are correct sir. I don't know any hiring manager. Do you think it's possible to do the same thing at home or I have to be hired?

You will not be able to trade physical power in any way from home, capital and credit requirements are *enormous*. Oh, and not sure what your end goal is but working on a real time desk doesn't necessarily teach you trading skills that are applicable to transferring to a financial trading role or trading your own $$ from home. However, you will learn a very solid base in fundamental drivers of price and knowledge of the physical power grid.

tqt1985 · Jan 20, 2015

bh_prop said:
You will not be able to trade physical power in any way from home, capital and credit requirements are *enormous*. Oh, and not sure what your end goal is but working on a real time desk doesn't necessarily teach you trading skills that are applicable to transferring to a financial trading role or trading your own $$ from home. However, you will learn a very solid base in fundamental drivers of price and knowledge of the physical power grid.

That was the exact answer I was looking for. My experience with trading is still very green, but I was very successful sticky to what I know best. However, that success also come with major drawback from mistakes a typical greenhorn would make. Thank you for been so helpful and your advice is spot on.