I told a friend over the weekend to look at buying HNU or BOIL. I hope he did as Monday gave a chance to buy at Friday's best price, and even slightly better. They rallied, fell back, then held flat all day. After hours, NG blasted higher and they were up 25% before the open. I sold out, expecting a dip, bought the dip and they're back up to the pre-open level for an extra 6%. With NG March only up to 1.78, it could easily continue higher, so I will hang on to BOIL but continue to watch for trade opportunities.
Did you hold a BOIL position over the weekend? I held a half position at 14.31. I will have to sell if it gaps down, but I simply bought the break of the downtrend. That is the risk. However, it could just be a retest of the breakout. The downtrend could act as support around 13.00. My stop sell is at 13.90 which was the breakout at the open on Friday.
Yes, I'm holding a fairly large BOIL position over the weekend, but I bought at 13.60 and traded for some gains. When did you buy? I don't see 14.30 as a break in the downtrend. I see the shorter term downtrend broken Thursday on the gap up open and high 14.25. That was a sell if you had held from buying at 13.80 on Wednesday. It has repeatedly made early rallies and failed so you would have been watching for that.
If you were sucked into buying the rally from 13.55 after the report, you needed to sell the reversal. I have a longer term downtrend line that was hit early Friday and broken hard at 9:45. A stop buy at 14.10 would have had you in, selling as it reversed from 14.66 and more confidently buying back under 14.10 at 1:00 as it hit the new support line and held.
I see NG is down today, hitting 1.522 for the March contract, but that doesn't mean it will be down tomorrow at the open. If it is, and BOIL gaps sharply lower, then it's a tricky trade. Selling for a loss sets up a fast reversal and whipsaw trying to have a position for a rally and avoid holding through a drop. Perhaps look at Feb. 6, where it gapped lower after showing some strength the previous 2 days. It held a range till 2pm, then broke lower. There was an early high of 21.48 to exit and two later pushes to 21.39. Trying to exit at a top with a stop buy higher is generally easier than selling on a stop and having it reverse soon after.
I bought at 14.31 based on the daily chart breakout since I didn't want to buy too early. The daily chart is not as accurate, and I intentionally pick 1-2% above the trendline to make sure it is a breakout. I see that using the hourly I would have bought at 13.90 at the open, but I didn't wan to keep getting whipped around and just wanted to wait for a bigger move. I wouldn't sell the reverse from 14.66 because that's too much trading. I would have only sold a break below 13.90 open price. You're still doing more trading than I can handle.
If I sell a gap down per my strategy, then I would not get back in until a break above Friday's high 14.67. This prevents too much trading. A gap down is a sign that the rally is not imminent, so I would be fine waiting for a couple more days to see if a downtrend continues or if a sideways trading range develops. I am intentionally sacrificing small gains and allowing -3% losses because I am only interested in the 10-50% gains from a swing trade.
If it is a small gap lower such as 3-5%, then I will likely sell and wait it out. A large gap lower like -10% seems uncalled for based on how low NG already is. With only a half position, I am not too concerned waiting it out. NG is a tough trade with all the gaps up and down. These types of decisions are a common problem.
The daily chart is practically a vertical line down, so hard to spot a breakout. Friday was also the first green day after 8 red days, so there was extra incentive to buy the low range instead of the breakout. To avoid trading too much, I would wait for a clear bottom of 4-5 days or more. NG can indeed be a tough trade.
I've joined the KOLD/BOIL trade this year. I bought KOLD a couple times and got stopped out for small losses, then bought on 18JAN at 84.31 (the "conservative" buy you mentioned). I sold at an average of 99.48. Now, I am watching for an entry point for BOIL, hopefully below 20.00. I will build a small position on a gap down, and then a large position on a break of the downtrend. Large for me is 10% of my account on BOIL/KOLD. A break of the downtrend would be 24.75 for Monday, and 23.50 for Tues. The gaps up are tricky and I will probably ignore any gap up >3% as they tend to move opposite the gap direction.
I agree it is unnecessary to hold losses, and I will keep my stops -3%. Greg's strategy could have worked much better if the 1st buy was small, then make larger purchases as it drops more. I don't know why he doesn't do it that way because he is clearly more convinced at lower prices, but maybe has less money available. It might be similar to JC Rochester - just wait until they make their 3rd purchase or put a stop buy above their purchase.
You bring up a good point that the NG trade is uncorrelated from equity markets. If QQQ is at the top of the channel or you already sold, this can be a trade while you wait for the next long QQQ setup. Personally, I like having a couple uncorrelated trades so my account has more chances for gains to compound.
Today is a perfect example of why trading NG can be so difficult. Fortunately I sold half my position on Friday for the gain. I waited to re-buy as it pushed up early and then was stopped out as it fell. It's now down over 4% from selling with NG at 2.06. It's another overstretched moment with possibly more stretching to come. One could go with a stop buy for BOIL at 22 or higher (now 21.84 low and up to .90s). Likely best to wait. Stopping in to KOLD would have worked out okay, but I simply couldn't force myself to do it, given the overall conditions.
I bought a small position (0.50%) of BOIL at 22.20. My stop at 24.75 did not trigger. Tomorrow, my stop is set for a downtrend break at 23.50. The order size for the stop will make it a 10% position. I really don't believe in buying dips as they go down, so that is why the buy today was so small. I will add another 0.50% at 21.00 using a limit order. At some point there is a fundamental bottom for NG. Sounds like it could go down another 5-10% so I am adding slowly as it goes down. I'd rather be a little late that and catch the ride on a rising train. Wed my stop buy will be around 22.25 based on the trendline so pretty soon I may have to buy it anyways unless it drops again tomorrow.
Today's action was difficult with the memory of Friday's reversal in mind and wanting to go long. I was stopped out twice and will wait on the sidelines. The trendline for QQQ held firm, so it was a buy. I bought some SOXL. Nothing big though. I still like HNU for a bigger move soon.
I told a friend over the weekend to look at buying HNU or BOIL. I hope he did as Monday gave a chance to buy at Friday's best price, and even slightly better. They rallied, fell back, then held flat all day. After hours, NG blasted higher and they were up 25% before the open. I sold out, expecting a dip, bought the dip and they're back up to the pre-open level for an extra 6%. With NG March only up to 1.78, it could easily continue higher, so I will hang on to BOIL but continue to watch for trade opportunities.
Did you hold a BOIL position over the weekend? I held a half position at 14.31. I will have to sell if it gaps down, but I simply bought the break of the downtrend. That is the risk. However, it could just be a retest of the breakout. The downtrend could act as support around 13.00. My stop sell is at 13.90 which was the breakout at the open on Friday.
Yes, I'm holding a fairly large BOIL position over the weekend, but I bought at 13.60 and traded for some gains. When did you buy? I don't see 14.30 as a break in the downtrend. I see the shorter term downtrend broken Thursday on the gap up open and high 14.25. That was a sell if you had held from buying at 13.80 on Wednesday. It has repeatedly made early rallies and failed so you would have been watching for that.
If you were sucked into buying the rally from 13.55 after the report, you needed to sell the reversal. I have a longer term downtrend line that was hit early Friday and broken hard at 9:45. A stop buy at 14.10 would have had you in, selling as it reversed from 14.66 and more confidently buying back under 14.10 at 1:00 as it hit the new support line and held.
I see NG is down today, hitting 1.522 for the March contract, but that doesn't mean it will be down tomorrow at the open. If it is, and BOIL gaps sharply lower, then it's a tricky trade. Selling for a loss sets up a fast reversal and whipsaw trying to have a position for a rally and avoid holding through a drop. Perhaps look at Feb. 6, where it gapped lower after showing some strength the previous 2 days. It held a range till 2pm, then broke lower. There was an early high of 21.48 to exit and two later pushes to 21.39. Trying to exit at a top with a stop buy higher is generally easier than selling on a stop and having it reverse soon after.
I bought at 14.31 based on the daily chart breakout since I didn't want to buy too early. The daily chart is not as accurate, and I intentionally pick 1-2% above the trendline to make sure it is a breakout. I see that using the hourly I would have bought at 13.90 at the open, but I didn't wan to keep getting whipped around and just wanted to wait for a bigger move. I wouldn't sell the reverse from 14.66 because that's too much trading. I would have only sold a break below 13.90 open price. You're still doing more trading than I can handle.
If I sell a gap down per my strategy, then I would not get back in until a break above Friday's high 14.67. This prevents too much trading. A gap down is a sign that the rally is not imminent, so I would be fine waiting for a couple more days to see if a downtrend continues or if a sideways trading range develops. I am intentionally sacrificing small gains and allowing -3% losses because I am only interested in the 10-50% gains from a swing trade.
If it is a small gap lower such as 3-5%, then I will likely sell and wait it out. A large gap lower like -10% seems uncalled for based on how low NG already is. With only a half position, I am not too concerned waiting it out. NG is a tough trade with all the gaps up and down. These types of decisions are a common problem.
The daily chart is practically a vertical line down, so hard to spot a breakout. Friday was also the first green day after 8 red days, so there was extra incentive to buy the low range instead of the breakout. To avoid trading too much, I would wait for a clear bottom of 4-5 days or more. NG can indeed be a tough trade.
I've joined the KOLD/BOIL trade this year. I bought KOLD a couple times and got stopped out for small losses, then bought on 18JAN at 84.31 (the "conservative" buy you mentioned). I sold at an average of 99.48. Now, I am watching for an entry point for BOIL, hopefully below 20.00. I will build a small position on a gap down, and then a large position on a break of the downtrend. Large for me is 10% of my account on BOIL/KOLD. A break of the downtrend would be 24.75 for Monday, and 23.50 for Tues. The gaps up are tricky and I will probably ignore any gap up >3% as they tend to move opposite the gap direction.
I agree it is unnecessary to hold losses, and I will keep my stops -3%. Greg's strategy could have worked much better if the 1st buy was small, then make larger purchases as it drops more. I don't know why he doesn't do it that way because he is clearly more convinced at lower prices, but maybe has less money available. It might be similar to JC Rochester - just wait until they make their 3rd purchase or put a stop buy above their purchase.
You bring up a good point that the NG trade is uncorrelated from equity markets. If QQQ is at the top of the channel or you already sold, this can be a trade while you wait for the next long QQQ setup. Personally, I like having a couple uncorrelated trades so my account has more chances for gains to compound.
Today is a perfect example of why trading NG can be so difficult. Fortunately I sold half my position on Friday for the gain. I waited to re-buy as it pushed up early and then was stopped out as it fell. It's now down over 4% from selling with NG at 2.06. It's another overstretched moment with possibly more stretching to come. One could go with a stop buy for BOIL at 22 or higher (now 21.84 low and up to .90s). Likely best to wait. Stopping in to KOLD would have worked out okay, but I simply couldn't force myself to do it, given the overall conditions.
I bought a small position (0.50%) of BOIL at 22.20. My stop at 24.75 did not trigger. Tomorrow, my stop is set for a downtrend break at 23.50. The order size for the stop will make it a 10% position. I really don't believe in buying dips as they go down, so that is why the buy today was so small. I will add another 0.50% at 21.00 using a limit order. At some point there is a fundamental bottom for NG. Sounds like it could go down another 5-10% so I am adding slowly as it goes down. I'd rather be a little late that and catch the ride on a rising train. Wed my stop buy will be around 22.25 based on the trendline so pretty soon I may have to buy it anyways unless it drops again tomorrow.
Today's action was difficult with the memory of Friday's reversal in mind and wanting to go long. I was stopped out twice and will wait on the sidelines. The trendline for QQQ held firm, so it was a buy. I bought some SOXL. Nothing big though. I still like HNU for a bigger move soon.