Natural gas has been dropping for ages, partly just because of lower demand in the recession, partly because the recession has freed up LNG supplied which are pulled into the US if the natural gas price rises, and partly because new techniques for extracting shale gas have increased the gas supply. Even the hard winter in the US this year has failed to push the price up meaningfully (I was on the verge of shorting the market in the middle of a particularly cold snap — with hindsight, that would have been a great trade). Now the market has broken below a long-term low, the breakout day had a wide range and volume was high. This is a strong signal that the market is moving lower. I am wary of trading natural gas because the spread is wide, so it costs a lot to get into the trade, but the strength of the signal means that I have taken the risk. I waited for the market to pull back before entering with a fairly wide stop. Short-term charts show appox. stop and entry levels (entry point at the cross).

I am lucky still to be in this trade after a run up late on Friday almost took out my stop. I have been placing wider stops recently and it seems to be paying off.