tf/futures•Posted by u/commodity_chris•about 2 months ago

Nat gas: the summer seasonal setup is here — historical data and plan

Natural gas has one of the most reliable seasonal patterns in commodities. Historically:

Seasonal bottom between mid-March and mid-April (injection season start)
Rally from June to September (AC demand + pre-winter buildup)
Average return from spring bottom to summer top: +35% over 15 years of data

This year the setup is even better:

Inventories at -8% vs the 5-year average
LNG exports up 20% with new terminals
Production flat as producers cut back after the crash to $1.50 in February

Long NG at $2.15, target $3.20, stop $1.85.

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macro_man·about 2 months agoedited

The seasonal is real but watch out for contango. If you hold futures, the roll costs you 5-8% per month right now. UNG (the ETF) loses value even when spot goes up because of this.

commodity_chrisOP·about 2 months agoedited

That's why I trade the futures contract month most correlated to my target (September). No roll. Direct entry on NGU26.

newbie_investor·about 2 months agoedited

Doesn't weather risk make nat gas almost impossible to trade? A hurricane or heat wave can move the price 15% in a single day.

swing_king·about 2 months agoedited

How do you calculate your sizing on commodities? Nat gas is so volatile that the standard 2% risk per trade rules seem inadequate.

commodity_chrisOP·about 2 months agoedited

ATR-based sizing. I take the 14-day ATR ($0.18 currently), my stop is at 1.5x ATR ($0.27 below), and I size so that distance = 1.5% of the account. That gives me about 3 contracts for my account.