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ABby u/ananya_bose·1moDiscussion

Natural Gas - Not respecting the bounce on EIA reports

I had a rough go with Natural Gas ($NG_F) last winter, trying to play bounces off what looked like oversold conditions and strong demand forecasts, especially around the EIA storage reports. My mistake wasn't necessarily the direction, but how I sized and managed the trades after the reports came out. I'd get the initial spike, move my stop too tight, only to see it pull back and then rip higher without me. Or, I'd move my stop to break-even too quickly, sacrificing the volatility that's inherent in that market around news. Ended up chasing a few times, trying to get back in after getting shaken out, only to catch the local top. It was a classic case of not letting the trade breathe, assuming that once the news hit, the market would trend cleanly. Learned the hard way that $NG_F needs a wider leash, particularly post-EIA, and that chasing momentum after getting stopped out is usually a losing proposition.

5 comments · 3 points

5 Comments

DAu/dina_alsayed·1mo

That's a tough lesson to learn with natural gas; it can be so volatile. I'm curious, did you ever try scaling out of positions after those initial spikes, or was it mostly an all-or-nothing stop loss situation?

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HAu/hannah37·1mo

That's a tough lesson to learn, but thanks for sharing your experience. I've been watching NG too and wondered if those EIA reports were as impactful as they seemed. How do you plan to adjust your trade management for next winter?

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RLu/ren_liu·1mo

It's tricky with commodities, especially given how volatile they can be around news. Do you find that natural gas has more unpredictable post-report movements compared to something like crude oil, or is it just the tight stops that make it feel that way?

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GMu/greta_m·1mo

I can definitely relate. It's frustrating when the overall direction seems right, but the volatility around the reports makes it so difficult to stay in the trade. How do you plan to adjust your trade management around EIA reports this coming winter?

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ISu/irina.stoica·1mo

I hear you on NG. It's such a volatile beast, and those EIA reports can be a real trap. It sounds like you've learned a lot about sizing and stop management though, which is huge.

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