How to start a natural gas day trading

natural gas price It fluctuates from moment to moment, as it is traded on the stock exchange. This price is determined by global supply and demand for physical raw materials, as well as expectations, supply and demand from traders. Daytraders do not assess the “real” value of natural gas. Instead, day traders take advantage of the commodity’s daily price fluctuations and try to make money regardless of whether its value rises, falls or remains virtually unchanged when trying Daytrada Natural Gas.

futures markets

Intraday trading in natural gas is speculating on its price movements in the short term. Natural gas is not dealt with or captured, but all trading transactions are done electronically and only gains or losses are reflected in the trading account.

There are many ways to shop every day natural gas. One way through futures contracts. A forward contract is an agreement to buy or sell something – such as natural gas, gold or wheat – at a future date. Daytraders close all contracts(s) each day and make a profit or loss on each trade based on the difference between the price they bought the contract and the price they sold.

Natural gas futures are traded through the Chicago Mercantile Exchange (CME Group). There are several types of natural gas, contracts that can be traded. The most heavily traded contract, and preferred by day traders, is the Henry Hub Natural Gas Futures (NG) contract. Each decade represents 10,000 million British thermal units (mmBtu).

On the futures exchange, the price of natural gas (NG) fluctuates in steps of 0.001 USD. This increase is called a “sign” – the smallest movement a futures contract can make. If you buy or sell a future contract, the number of ticks the price moves away from the entry price determines your profit or loss. To calculate your profit or loss (it shows you your trading platform, but it is good to understand how it works), you must first know the hash value of the contract you are trading.

For a natural gas contract, the book value is $10. This is because the contract represents 10,000 MMBtu and 10,000 MMBtu multiplied by the $0.001 tick size yields $10. This means that for each contract, the movement with the tick will result in a profit or loss of $10. If you move $5, you will win or lose $50. If you move five dollars and you have three contracts, your profit or loss will be $150.

Trading accounts and margin

The amount you need in your account to trade Natural Gas (NG) futures depends on your futures broker. For example, NinjaTrader requires you to have $1000 in your account to open a day trading position of a Natural Gas (NG) contract. You also need enough in your account to cover potential losses (you need more than $1,000).

These numbers assume that you trade daily and close positions before the market closes each day. If you hold overnight positions, you are subject to initial margin and maintenance margin requirements, which require you to have more funds in your account.

ETFs and natural gas stock market

Another way to trade natural gas on a daily basis is through an exchange-traded fund United States Natural Gas Fund (UNG). Or, if you’re looking for a more volatile alternative (it moves three times each day), 3X Long Natural Gas ETN. If you have a stock trading account, you can trade with natural gas price movements.

3 times the reversed natural gas ETN (DGAZ) It is another popular natural gas ETF. Since it is an inverse fund, it moves in the opposite direction to the price of natural gas daily.

The intraday price movements of these products reflect daily (not long-term) percentage changes in natural gas prices.

Products are traded as shares. The minimum price movement is $0.01, so you gain or lose $0.01 for every share you own every time the price changes by a penny. Stocks and ETFs typically trade in blocks of 100 shares (called contracts), so if the price moves a penny and you have 100 shares, you win or lose $1. If the price moves by $1, from $5 to $6, you win or lose $100 on your 100 stock position. If you have 500 shares, you will win or lose $500 on the same price movement.

The amount you need in your account to trade a natural gas ETF depends on the price of the ETF, your leverage, and the size of your position.

Buying natural gas from CMC markets

CMC . Markets It is a global company with a trading platform for online trading of derivative financial instruments, primarily trading CFDs on stocks, indices, commodities, ETFs, currencies and cryptocurrencies. to CMC . Markets.

Buy natural gas from AvaTrade

AvaTrade It is a forex and CFD broker based in Dublin, Ireland. Through trading platforms and mobile apps, the company offers trading in many different markets, including currencies, commodities, stock indices, stocks, exchange-traded funds, bitcoin, and bonds. Until AvaTrade .

Buy Natural Gas from IG

also IG However, trade displays in natural gas. to IG . site.

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