The intraday movement in natural gas is huge, volumes are great and margins even after all the leverage is gone post Aug21 is far less compared to others.
Moreover, stop loss hunting that everyone complaints doesn’t happen much in commodities (my assumption).
Even if we get 1rs/week, we still make 10% return per week and 40% per month (15k is the mis margin for natgas future), isn’t 1rs per week target comparatively easy compared to stocks and indices ? Or am I missing something ? Today itself it moved 15% intraday and such moves happen on a regular basis, tell me the stock or index which gives so much opportunity ?
As you said today it moved 15% , what happens to your trading capital if you caught on the opposite position. Profits doesn’t depends on instruments but on trading strategy, money management, risk management and of course psychology.
Yes , volumes are good. better alternative to crude oil as of now.
This is your assumption. just think about this statement. you are saying that institutions know where exactly is YOUR stop. They don’t care about about small retail stops. However , they do look for liquidity(lots of orders) and price chases liquidity. Why? another post is reqd to explain that.
you are only look at profits, what about losses? what if you lose 2rs/week consistently for weeks? Are you saying you have complete control over the outcome of your trades.
Indices are generally lower volatility compared to commodities. This is due to higher liquidity(hence low vol). It looks easy but very hard to capture the intraday moves in commodities.
In the last 3 months , only 4 days natgas have traded above 10%. Is this regular?
Natgas is no better than indicies or currencies. The opportunities are there if any you can find in any instrument. one is not better than other.
however, what you trade depends on your comfort level. Can you sit for the whole day(13 hrs) to trade commodities compared to say indicies(5 hrs). i dunno.
Hmm that is true, 1rs per week making sounds easy, but the other side could be helped with stop loss, but what if such stops are hit consistently, true.
Sir, where can we find this natgas daily change data ?
@trader_dude Thanks for replying so patiently, you seem more experienced, your advice is practical.
I trade commodities fulltime, and as much as it can multiply your account by being on the right side of the wild swings it has, you can pretty much blow up as well.
You mention 1rs/week as so easy as if its on the table everyday for you. Traders spent years honing their skills and finding their edge, and NG is no different. You might wanna read about Amaranth Natural Gas Gamble.
But you will definitely love NG if you design strategies that are momentum based and can handle the swings it has.
For the rest of your doubts, I think what @trader_dude has mentioned is more than enough.
I’ve been trading natural gas for quite some time now and the big moves and high liquidity are not as common as you seem to think. Based on the backtesting I did for the last 3 years of data, it only moves around 50 ticks per day (in the mcx session) on average. Sometimes the volatility is slightly more and sometimes it’s slightly less but the brief periods of crazy volatility like the one you’re seeing right now are not the norm. I’ve had many days where the price is just stuck in a tight range all-day and I have to struggle to not fall asleep.