Energy Trades

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Last weekend, I talked about being ready to enter long trades in two energy commodities: Crude Oil and Natural Gas.

Both these trades have gone ahead and are now sitting in profit. I personally closed out my long Natural Gas trade when it stopped acting right last Thursday, but I have kept my long Crude Oil trade open. Originally, I had thought that the Natural Gas set-up looked more promising than the Crude Oil set-up, but it seems to have worked out the other way around. This doesn’t have to be a problem in trading, as it is better to go with the flow of what the market does and react to how the market reactsCrude Oil

Natural Gas

I was originally waiting for a bullish bounce following a touch of $2.84. This occurred with the large doji candlestick on the daily chart above then the price was finally hit. I was ready to enter long upon a break above the high of that doji candlestick, as it was a large, dominant size. Unfortunately, the price gapped up some way above that level over the weekend, so my entry was considerably higher than I wanted and planned for. Often with gaps it is tempting to wait for the gap to be filled before entering. However, if you do that, you run the risk of the price taking off and missing the trade entirely. For this reason, I went ahead and entered anyway. I exited the trade when the advance halted on Thursday and the price began to fall heavily. However, if you are in this trade, I wouldn’t say the chart looks too scary to stick with it. I don’t see any major resistance levels before 3.30 so there is no reason why it shouldn’t run for a lot more profit.

Natural Gas

Crude Oil

I was waiting for a bullish bounce off $42.23 as this level has been the low for a long time, almost an entire year in fact. I didn’t like the way the bullish rejection of the level started with two small candlesticks, but once the price broke up above $44.00 I felt much more comfortable and entered long. The price has stayed in a very bullish and steady trend, and the bullish momentum increased sharply on Friday without going overly parabolic. I have a target of $50.00 in mind, but if the price stalls I will look to take at least partial profit. Of course, the $47.00 and $48.00 levels also look as if they might produce some resistance. This trade is going very well so far. It is so much easier psychologically to stay in trades that perform well almost every day, which is another reason why these are such great trades to identify and act upon when you can.

Crude Oil

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.
Learn more from Adam in his free lessons at FX Academy.