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Outlook on Gasoline?

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Hi chaps,

I hope you had a wonderful 2018.

Where do you guys think the gasoline price will head? On the chart, it looks like a beautiful downtrend. However, I entered the trade today only to find the price moved up against me. I'm new in energies. Any thought on the causations behind gasoline price movement and any outlook on its future direction?

 

Thanks!

50695958_Screenshot2018-12-31at16_26_35.thumb.png.83036449b2cb9f76388ddad7174c91cf.png

 

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@PipEvangelist,

Yes thank you and I hope you too had a wonderful 2018. 

When I look at the chart from a 'Daily' timeframe then yes I agree with you totally that it is a beautiful downtrend similar to WTI Crude and Brent Crude Oil charts. Heating Oil and London Gas oil are very similar too so you could have shorted any one of these.

In my opinion the better short has been Natural Gas from a 'point/profit' perspective and 'margin requirement' so cost perspective. The price action in terms of sharp downward move seems stronger too. I am short Natural Gas and if you are interested then you can read my Natural Gas thread rather than me repeating it here. 

I personally think the big chunk of the downward move in all of the above has occurred. Yes there may still be a little more downward movement but any new trade would incur added risk of a trend reversal, relief rally, short covering rally, some serious profit taking amplifying the move upwards, etc. 

When looking at the monthly chart you one could argue that it could go down further to the 12000's. On the weekly chart one could argue it could even go down to the 10000's. On the daily chart the move is beginning to look exhausted. Now these are just personal opinions. The truth is I simply do not know what is going to happen to the future price direction of Gasoline or any of the other 'Energy' Commodities.

How did you come to the decision of entering a short on Gasoline now? What made you wait this long? Why Gasoline over the other 'Energies? 

Does this trade support your 'Trading Strategy' as part of your 'Trading Plan'?

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@TrendFollower

Hi,

Thanks for your thought.

I made devotion of shorting RB because I saw a gap down on Sunday, thought there might be a downward pressure to that movement. Other energies were at this lukewarm zone where price starts to rise a bit and consolidate.

im new to energies, I don’t know if the fundamentals like oil reserves and demand  would support a further downward movement.

i have to admit that I did not follow my trading plan for that trade. I don’t have a trading plan for energies. I thought they are a different market than forex. Still exploring what works the best for commodities trading.

what about you? Do you trade on trend or intraday?

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@PipEvangelist,

I trade on trends based on price action and supported by volume and other indicators. I follow 'Trend Following' principles so feel free to have a look at my previous threads and post to get a better understanding of my trading philosophy rather than me repeat it here. 

The only asset I have traded Intraday is Cryptocurrencies but not at the moment. I am trading them based on trends at the moment. 

It is important to have an awareness and understanding of the fundamentals. However I trade on price action rather than fundamentals.

In my personal opinion if you are going to trade any asset whether it be Stocks, Commodities, FX, etc. then you must have a trading plan and a clear trading strategy which leads you to a trading system. This will confirm your trading philosophy. This may sound cheesy but, "Failing to Plan is a Plan to Fail"

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@PipEvangelist I have just been reading this thread and I would say that it is most important to not only have a trading plan, but to also know that your plan can carry from market to market. A good plan based on sound TA should be able to be used across different markets and so when you do move across, why deviate from your plan. Just by looking at your daily chart that you submitted, each historical down gap or up gap was followed by some movement in the opposite direction immediately in most cases. Had you been watching this market carefully, you would have no doubt shorted it a bit closer to the previous massive gap down rather than the very last tiddler gap down. After such an extensive downward movement, it appears to be crying out for a retrace of some sort or another as @TrendFollower points out, but also, it may happen, it may not, who knows. The odds are a lot higher of this happening, the longer the trend continues down. I am new to this as well but it is important not to rush into a riskier trade. There will always be another trade waiting round the corner.

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@Nelsy-Boy,

Yes quite right. If the trading plan is right and the trading strategy is well thought through and effective then absolutely it can be used regardless of the asset and the market one wishes to trade. 

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