Boil trading at multi year lows

Just a heads up that boil has dropped to multi year lows.

Andy

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A 1x alternative to 2x BOIL is UNG.

"Daily spot demand could sink into the weekend as weather-driven gas demand is likely to slump 10 Bcf/d from Wednesday to Friday,” Rubin said. “The primary near-term price catalyst, however, will be the April contract options expiry tomorrow and final settlement Wednesday — likely increasing volatility.”

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Andy,

Thanks for the ‘heads up’ on BOIL.

I traded the 1x version, UGN, instead and traded badly by doing a rushed entry at market. Averaged down in two legs, making my basis 6.99 per share. Shoulda averaged in one more time as the 6.93 bottom formed, but lost my nerve. Got out 60 minutes later at 7.09, for a 1.43% profit, or good enough for the girls I go dancing with.

Quill,

That’s a 5-minute version of the 1-minute version I use when day trading. Its setup is simple, a pair of triangular MAs (5 bar and 6 bar) and hollow candlesticks painted by the CAM indicator.

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Sorry went with the inverse of BOIL since 3/6/2023 up 40.0353 percent. Not to shabby.
I am a Tetter Totter kind of person. You folks ought to have set aside some bread for the Tetter Totters in order to protect ones ASSets.

Ardrindam - notice the 20 ema xover greater than 2.5 percent. and since 12/19/22. Don’tcha luv it when a plan comes together. UP 264.7059 percent on pure luck.

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Quill,

Shorting nat gas on Mar 6 was very skilled trading, and that’s why you are the GOAT, not me. LOL, (My rules --and tape reading-- wouldn’t have let me get until Mar 9th.)

Could I ask a question that you don’t have to answer. As a percentage of AUM, how big was your position in KOLD? I don’t need to know the dollar amounts , which are no one’s business but your own. But how you size your positions relative to each of your various trading program might be of help to them on the sidelines.

Kudos on the short.

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Your welcome Arindam, I did a little better in at $3.68 out at $3.76 for 2.17 percent. Not bad for pure luck.

Andy

Also in on GBTC at $15.23 and out at $15.46 for 1.5 percent. These are all very small trades for learning purposes.

Andy

Andy,

No, No, No. When a trade is planned, and it is executed to plan, take credit, even if the trade loses money. What matters in this game is ‘process’.

Yeah, I was watching BITO as well and shoulda traded it. But I hadn’t yet decided, once and for all, whether to include cryptos in my trading universe or not. Also, I haven’t yet done the work to know when and how they react to the macros. BTC and such seem to trade with the PMs, and all of them counter to the $US. But I have yet done the needed charting.

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Arindam,

re: the power of compounding never fails.
re: AUM’s
re: 100 shares as a starter kit.

Not quite, you be the GOAT and I the assistant Billy Goat.

I work from a pool of dollars allocated to each portfolio. Not allowed to Pay Peter to Pay Paul.

For KOLD I bought 100 shares and then bought 50 shares more. eg… 100 - 150 - 200 - 250 up to 1000 shares. It is easier on the math. If I didn’t have enough money to buy the amount shares, I would wait until I have enough money in the pool.

Back in 2006 I made a lucky position in starting the Tetter Totter with SPXL / SPXS with a 50 k bankroll. I sold some of GMCR (GMCR Split History, started with 50K at $17- $21.00 to fund the project).

Then compound the profits plus the principle at each new Buying position. The SP’s had another name before changing todays current name. The Sp’s charts don’t go back that far.

In my earlier days, I did for every green OHLC bar heading north I would buy 10 shares no matter what the price. Then sell the whole pile at the finish line. Stopped because I was getting yelled at.

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Ok Arindam, thanks, but my process is very shaky. I seem to be very good at catching the tiger by the tail but poor at letting loose. Today instead of using simon sez 3 on the 2 months chart I went with Simon Sez 3 on a 1 day chart. On the 1 day chart it worked perfectly but on the 2 month chart I couldn’t have been in either of them. Still trying to learn.

Andy

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Hi Andy and Arindam,

Was these day trades? If so, what are the rules you use for these

I think I understood Quills rules which I believe helps with swing trade, but I am assuming that doesn’t help in quick day trade, right?

Arindam, as the more experienced person, do you have any specific entry/exit points you use. I know you mentioned that when things stall, you don’t like it and come out…I guess it is relatively easy if the trade immediately goes up by 2 percent and then one can come out at any time it turns out with trail stop…but if the price drops by 2 percent immediately after you buy, what would you do then?

Andy, since you are also learning, can you explain your reasoning for the entry and exit for those trades.

Thanks a lot
Charlie

Andy,

It’s not a matter of ‘either/or’. The trades enabled by a 2-month lookback aren’t the same trades enabled by a 2-dy chart. They’re different games entirely.

Why has nat gas been on a multi-month decline? Fundamentals, and Quill was shrewd to go short. Today’s drop in prices is due to futures contract expirations. It was a blue moon event that had to be traded quickly.

Quill, that is awesome…I too bought BOIL when it was 4.50…and then went cold feet as it went down…I seriously thought I should sell and buy KOLD but was wondering what if that trade turned? So, now close to $90 loss on a$450 trade…

On retrospect, I can see my mistake. Should have made a a plan…if a loss of x percentage, then sell and reverse…

Another stupid thing I did… confused myself into thinking that the Nat gas had to reverse and go up , after being down so much for so long… but I guess like Arindam said…market can be irrational for much longer than we can remain solvent…

Sure Inspired but do not follow what I am doing because I am shaky. I probably shouldn’t have done either trade but here is my thinking.

I have wanted to own GBTC but haven’t bought in yet. Bitcoin has been climbing and I should have bought in earlier. GBTC is an OTC trust invested in Bitcoin here is the 2 month chart.

Ok looking at that chart GBTC is on the way down and shouldn’t be bought. Time to get in later. But…

Now look at that waterfall around the 11:00 time, let’s call it 11:15, I bought in then thinking I could get a trade out of it at $15.23 and then back out at $15.46 when it hit towards the top. So what did I learn? I learned as long as you are very fast on your feet you can make some money off these trades but was it smart? I would say no because I could have been steam rolled. I would much rather jump into GBTC towards a bottom than at a top. So I was very lucky although Simon Sez did save me on form.

Now lets look at Boil. I was watching MSNBC and was seeing Boil drop to a multi year low. Well going on what Arindam said about reversion to the mean I thought this might be a good time to get into boil. Now realize I had no clue about what Arindam said about futures contract. I just liked jumping onto a low but what does the 2 month chart look like?

Everything on that chart is saying do not buy. But what does the 1 day chart say?

Well look at 2:20 I was in at $3.68 and back out at $3.76.

This inspired, while following simon sez on such a short time period is day trading. It’s not something I am looking to do. I actually went into Boil as a long term tetter totter trade but when looking at the 2 month chart realized that I wasn’t following the rules. I thought I was smart and getting in early. So I turned around and made it a short term trade. So in reality it was a failure. Not being hard on my self but just being truthful. I really did get lucky.

In fact I was lucky on both of these trades and neither one of them should have been made under my criteria which is more of a long term ride. When I say long term I am looking for 6 to 7 days but realizing, according to the charts, could be shorter. I look at the Daily, 5 day and 2 month charts to try and gauge if I should be buying in but where I went wrong is I used the Daily as my primary when I should have been using the 2 month and had the Daily and 5 day as secondary charts to back up my thesis on the 2 month chart. Hope that helps.

Andy

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Charlie,

That 2% (or 2.5%) gig is Quill’s baby, not mine. Yeah, there’ve been days when I’ve made 5% or 8% on an intra-day trade. But I’m content to get what the tape --and my typically clumsy executions – lets me have and to call it A Good Day. Also, as I’ve made clear in many posts, my goals and engagement with the equity markets differs radically from Quill’s. He’s trying to super-size his account. I know I’ve already got 'Enough". For him, trading is a full-time, owner-operator business. For me, it’s just a hobby. Thus, we can swap ideas. But he trades in size, and I’m often making tiny, tiny bets.

Put it this way. For a bond position to be marketable, it typically requires a min of two bonds. If all bonds are divided into three tranches --defensive, enterprising, speculative-- then I never let a typ junk bond position become more than 1/2 of 1% of AUM and 2% for a top-tier credit. That meant I was --and still am-- typically carrying hundreds of positions. That’s a risk-management style I’m comfortable with. “Bet widely. Bet small.” Quill’s got lots of irons in the fire with his divvie projects etc. But he’s also willing to “swing a big line”, to quote Jesse Livermore, the greatest trader of them all. I’m not. Size chokes me. So I don’t even try it. Thus, schemes like the following make sense to me, though I don’t follow them very exactly. (LOL)

There are (roughly) 250 market days per year. If one averages a measly 4 basis points of gain per market day, then one makes an respectable 10% per year. If one divides one’s trading account into ten piles of cash --per Wm O’Neil-- and puts on one trade that makes a mere 40 bps in a day, then the whole account has done its job. Risk-adjusted returns --another name for the returns achieved with that kind of deleveraging-- don’t spend any better at the grocery store or gas pump than than absolute returns. But they let me sleep at night, as well as face a very uncertain future with a lot of equanimity. If one’s piles of cash are in the hundreds, and if one’s trades are many but small, then the same effect is achieved. You can’t get yourself thrown out of the game for ever running out of money to play it.

My entry points and exit points when I’m day-trading? If I’m executing properly, I’m doing what the tape tells me to do, and my entries and exits are crisp. Else, and more frequently, I’m getting in too early and getting out too early, or I’m bungling the trade entirely and eating a bigger loss than should have happened. But that is one thing I’m pretty good at. When I’ve put on a day trade that is intended to be a day trade and the trade isn’t working, I’ll yank it. No wishing, hoping, or hanging around. I get myself flat with a market order and turn my attention to other things.

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Gentlemen,

re: Simon Sez III minute chart

what are you consistant minute charts are you guys are using.

the chart below using 20 ema and 1 minute chart. I could make money all day long. Profits to be determined.


1 minute chart

5 minute

Quill,

Hindsight is 20/20. What matters is whether you’re using that setup to trade BOIL or UNG right now, at this very minute, and turning a profit.

[later]

This is a hoot. You favor exponential MAs. I favor triangular. So here’s a heads to heads comparison, where ‘orange’ = EMA(20) and ‘lime’ = TRIMA (20).

I don’t think I have a Moving Average Triangular with Stockcharts, but will try and find it.

In the meantime, can you run your scanning tools with the Trima (20) and how many did it find.
The last run found 65 stocks over the 20 ema line.
VKTX up 59.99% or + $ 5.36.
BABA up 11.63% or +$10.00
BOWL up 5.39% or +$0.82 cents
LOVE up 14.92% or +$3.58
BA up 2.57% or +$ 5 bux.
Found 21 over the 2.5% line. The remainder is over on average 1.25 %
Going to see if I can incorporate these findings into my 2.5 % theory portfolio as an experiment.

So if I throw dart at the list and buy that stock, I could with 100 or less shares make money daily without really trying. WOW.

Should we call it Simon Sez V. Need figure out to write two (2) simple rules. Run this scan 3x a day. morning, noon and 3:30pm. It only takes 1 second to produce a list.


Quill -

Quill,

The diff between the various moving averages is a consequnce of what weight they put on the various parts of the price series they are summing. Thus, ‘simple’ MAs put an equal weight on each of the inputs, be that 5-period, 20-period, whatever. That’s their virtue. No single day is going to make much of a differnce unless that day is really extreme. Hence, SMAs are ‘robust’.

I don’t remember the formula for EMAs. But its effect is obvious in a chart. The plotted line gets yanked all over the place, very abruptly, because EMAs respond very rapidly and very strongly to the most recent price. Ditto HULL MAs, which make for truly ugly charts.

Weighted MAs are a good compromise between ‘simple’ and ‘exponential’, and they make for attractive charts. But my favorite is ‘triangular’, because their swooping curves are so graceful.

But here’s the real key to choosing a MA type. By tweaking the lookback period, almost any MA type can be make to approximate the look of any other and provide nearly the same x-over signals. So the choice of which MA to use comes down to how much noise you want to filter out of the signal and how graceful you want your charts to look.