Tuesday, 22 July 2008

Natural Gas Stops & Portfolio Update

Looks like natural gas is getting demolished again this morning. Just did some quick numbers on that trade to see where it is now in relation to my stop. As you'll see on my latest signals page table, this is a helluva volatile market, which, even with my recently updated setup, still has a largest past drawdown of 29 percent. The stop is still a ways to go below, so the current trading is well within the historic volatility for this market. (Remember Amaranth?) The stop for my 200-percent leveraged natural gas position (the HNU Horizons BetaPro Fund, trading in Toronto) is $18.95. (This morning it's trading at $25.15.) I should note that this stop for HNU is actually based on a 58-percent loss, as it's a 200-percent leveraged fund and, accordingly, I used half of my maximum position size for this setup. (See that info on my latest signals page table.) For the UNG Natural Gas Fund, the stop would be 29 percent below the June 23 entry price of $61.97, or $44.00. Yeah, big losses. Like I said, this is a volatile market. That's why the position sizes have to be quite low. Otherwise, I risk getting wiped out. See more on my risk-control techniques on my how it works and glossary pages. Also check out my portfolio page, which I've just updated with my latest trade returns. Good luck this week!

TAGS: ProShares, natural gas, Horizons BetaPro, HNU, COT, Commitments of Traders, market timing, trading system development, CFTC, Commodity Futures Trading Commission, COTs Timer

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