March 11, 2019 Last updated March 4th, 2019 121 Reads share

Technical Analysis Based Short Term Energy Forecasts Allow for Successful Energy Trading and Risk Management

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The energy markets have always been very volatile and every few years they experience huge price swings. The fact of the matter is that energy prices are not influenced by supply and demand alone. Factors that influence energy prices also include geopolitical situations, weather, shifts in economic policy, the value of the U.S. dollar, and many others. Therefore, getting a clear picture of the long-term moves is often very difficult.

Why Volatility Occurs?

There can be various reasons for the price volatility in energy markets. One reason that crude oil and petroleum product prices turn volatile is that certain events can upset the balance of supply and demand. There are several types of disruptions that can occur, such as, political turbulence in oil-producing countries or large-scale weather events causing disruptions in supply, just to name a few.

Nonetheless, the volatility in energy commodity markets makes it difficult for the individual traders or companies who trade crude oil futures to make decisions on probable prices in coming days, weeks, or months. To help make an accurate and reliable prediction in the short-term one should use technical analysis. For successful energy trading and risk management, the best method is to study technical analysis based short term energy forecasts.

Why Is A Technical Analysis Based Weekly Forecast Effective?

As already stated, making the accurate prediction of crude oil, gasoline, and other petroleum products prices is very difficult, as they are influenced by geopolitical and various other factors. However, charts discount everything; hence, if it has an effect on the market it will be indicated in a technical analysis based weekly energy forecast.

Through mediums of charts and graphs in combination with various mathematical and statistical methods, the commodity price changes can be studied and more readily understood. In simple terms, technical analysis is all about studying price fluctuations, and through those changes and the patterns that form, conceiving a near-term energy market forecast that can be used to make trading decisions.

Thus, to have highly accurate near-term outlooks for WTI and Brent crude oil prices, including probable direction and strength of direction, the best option is to use a technical analysis based forecast. Also, from these forecasts, one can figure out the key support and resistance levels. Simply speaking, by planning trading strategies around these forecasts market participants can make informed decisions that match with their risk appetites and goals.

Why Short Term Energy Forecasts Are The Key?

Fundamentals will always rule the long-term, but short term trades help build the right positions for the long term. By monitoring only the fundamental factors it is difficult to build a position as generally don’t account for short term corrections that could change into long-term trends.

In fact, it’s the short-term energy forecasts and the short-term trades you make based on the information gathered from the forecasts that help to make informed trading decisions; so you can mitigate some of the risks and make profits.

Why Technical Analysis, Charts, Graphs Are Important?

Charts and graphs tell us all that we want to know about price action because all known information is discounted in the charts. This means any information that a trader acts upon is reflected in the price. We can learn whether the prices are trending, neutral, bullish, bearish, or more by studying the charts. Moreover, a technical analysis based energy forecast can tell us where support and resistance are and where lower risk trades may be entered and exited.

Why Short Term Trading Is The Key?

Any individual or a company that trades energy commodities or whose business is directly linked to the prices of energy products is constantly worried about sudden changes in prices and the risks that go along with every trade they make. Also, their focus is on the best way to mitigate the risks and how to exploit the market’s instability. They can depend on the short term outlooks of energy price given in a technical analysis based forecast to carry out short term trading and, maximize gains while cutting the average buying cost. As stated, short term trades are key because they allow traders and investors to build the right positions for the long term.

Why Technical Analysis Based Forecast Is Good For Short-Term Trades?

A technically and mathematically driven energy forecast is good in the near term because it enables the traders to identify short term trades. Also, a forecast generated through technical analysis is good for the short term, as it helps traders to gauge the direction of the market and probable strength of the trend. Thus, traders and investors can confidently enter short term trades and can mitigate their risks and let profits to run. In this way, technical analysis is an effective way of managing price risk. Moreover, both the individual trader and a company can use these technical forecasts and the information given therein, to make educated trade decisions.

Why Using Services Of A Technical Forecaster And Technical Analyst Make Sense?

When subscribing to weekly energy forecasts, commentaries, and daily updates from a well-known technical forecaster and technical analyst, one also gets their one-on-one support. Traders who are constantly taking losses can subscribe to forecasts published by a well-respected energy consulting firm like Kase and Company, Inc., to help build a profitable strategy. The technical experts will advise and help them tailor strategies to meet their goals. In the end, they benefit from the one-on-one support of technical experts.


Conclusion

The bottom line is that a highly accurate short term energy forecasts from a good technical forecaster and analyst helps greatly in making informed trading decisions to mitigate risk and to allow profits to run.

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Cynthia A. Kase

Cynthia A. Kase

Cynthia A. Kase, CMT, MFTA, an expert on crude oil, refined products, fuel oil, natural gas and related commodities trading and hedging, a technical forecaster, and energy value and price risk analyst.

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