Picking Bottoms is a Dirty Business
Picking Bottoms is a Dirty Business
One of the first rules/cheesy đ§ sayings I learnt @ trading school was, âpicking bottoms is a dirty businessâ đ© and it is clearly a rule that still applies today.
This week US gas has already hit 30 year lows and European gas has managed to find its way back to pre-invasion levels, despite the lack of anything meaningful from Russia!
You donât have to look particular hard to find the answer to this bearish conundrum, its quite simple really, The Weather â 1 Everything else 0!
Things are never that simple though and I am sure that many traders have been caught out and lost money trying to pick a floor that so far hasnât been reached. As trust and integrity is a key part of any coaching relationship, I donât mind admitting that I am one of them!!
Last week I forgot or disregarded my own schooling and armed with just a search engine, I decided that European gas was near its floor and it was time to add some to my own portfolio. My adventure didnât last long and thankfully I adhered to my stop levels and exited stage left a couple of days later, down but not out.
I spent 13 mostly wonderful years trading gas. I had the support of other great traders, mostly great managers, analysts, a weather man (rightly or wrongly it was always a man) and excellent I.T. infrastructure and I didnât always win then, so God knows why I thought me and everyoneâs favourite search engine was about to beat the market, but hey ho!!
I have been reminded of a couple of valuable lessons, including that trips down memory lane may not be as romantic as first thought . I have noted them down to hopefully never be repeated again and will revert to my proven products and strategy going forwards.
I have also asked myself the question âwhat would I do now, if I was still in the market?â and the answer would be very different, depending on where I was plying my trade.
If I was @ a big shop and the analysis showed what I think it does, I had a manager and team that trusted me and a VAR and stop loss that allowed me, I would definitely be scaling in and going long right now (I am talking Euro gas, I know nothing about the US at all).
If I was at a smaller shop, without all of the above luxuries I would unfortunately be having to play a very different game. You have to focus on your own scenario and play by the rules set out by the people that pay you.
FOMO can be an extremely annoying part of trading, but it can never kill you đȘ đ” unless you welcome it in!
Ps sorry for the picture, but it does illustrate the point rather well!
#trading #europeangas #usnatgas #bottoms