Natural Gas is one of the most widely used sources of energy for domestic and commercial purposes. Due to its efficiency, Natural Gas has attained more traction in the trading markets. It has thus become among the most essential commodities traded online. The ability to speculate on the future price movements of natural gas has attracted more people to join the online markets where natural gas is traded.
Natural Gas can be traded through future contracts, options contracts, contracts for differences (CFDs), or even EFTs. Each of these options has its pros and cons. Similarly, due to the unstable and fluctuating prices of natural gas every season, most traders have learnt various strategies to use when they want to trade natural gas.
These strategies include;
Daily trading strategy- here you open and close trades in the same day meaning that you get the results at the end of the day. The mostly used type is the trend-following strategy.
Range trading strategy- similar to day trading but involves trading in the absence of trends. It involves buying when the natural gas is at the lower support range and selling when it reaches the upper range resistance.
Breakout trading strategy- used when the price breaks below a support level formed previously, or where the price breaks above the resistance formed previously.
What Affects the Value of Natural Gas?
Every trade enthusiast interested in trading Natural Gas must know some of the factors that affect the value of Natural Gas.
Demand and Supply
Natural Gas is used for domestic and commercial purposes. Commercially, it is used on a large scale for power production, and so on. Due to its efficiency and availability, most companies are joining the Natural Gas online market worldwide. As a result, the demand for this commodity continues to skyrocket and so does its supply. In relation, as the demand increases, the price of natural gas is also highly likely to go up.
Weather
You might be wondering; why does the price of Natural Gas fluctuate when it is produced every year? Well, there are seasons when Natural Gas is used more than other seasons. For instance, in the United States, most residents use Natural Gas to heat their homes during winter. At this period, the usage of Natural Gas is highly likely to be more than the production rates. As a result, the Natural Gas reserves experience a drop. Such a period is known as the `Withdrawal Season` in Natural Gas trade. Conversely, there is the `Injection Season` when the Natural Gas usage drops, production becomes more and thus the Natural Gas reserves fill up.
Competition
Various other sources of energy subject Natural Gas to stiff competition. These include; oil, solar, wind, among others. Depending on the level and amount of competition, the prices of Natural Gas will keep fluctuating in the market.
Why Should One Trade Natural Gas?
Notably, the demand for Natural Gas has spiked in the recent past. This is because Natural Gas is eco friendly, efficient, and slightly cheaper than the other sources of energy. The call for a clean and an environmentally friendly source of energy continues to rise globally. Therefore, the use of Natural Gas has become one of the most effective ways of advocating for the green economy. In that regard, any person who subscribes to this course may thus decide to trade Natural Gas.
Moreover, Natural Gas usage is consistently gaining traction in various sectors. For instance, vehicles can use Natural Gas as an alternative for petroleum or diesel. This reduces environmental pollution since Natural Gas is environmentally friendly. Similarly, research reveals an increasing development of new companies and the subsequent deviation from the use of oil to Natural Gas by these companies to steer their daily operations.
Natural Gas is a scarce source of energy. This means that it can be used to track the inflation rates, and the depreciating currencies to manage economic situations in States.
Finally, it suffices to say that speculating the future price movements of Natural Gas could be slightly easier. This is because it is a common practice for Natural Gas usage to increase in winter and drop in summer seasons. A dedicated trader may use this to their advantage.
Trade Natural Gas with PrimeXBT
Various online brokers exist in Natural Gas markets. However, PrimeXBT is one of the high ranking brokers that every trader would want to use when trading Natural gas. PrimeXBT enables the traders to access the margin trading that comes with leverage ratios of up to 100:1. Moreover, PrimeXBT offers traders with advanced charting tools such as trend-measurement tools, position sizing tools, and fully-customizable technical indicators. These tools can be used by both beginners and experienced traders.
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