Why You Need A Good Energy Markets Technical Forecaster?

With the threat of volatility always looming in the energy markets it is imperative on the part of natural gas, WTI or Brent crude oil, diesel or gasoline traders to secure low-risk positions. They should be alert about the risks posed by the volatile energy markets and mitigate that risk in a timely manner so that they can lock in profits or minimize losses.

Losses do occur and more often are suffered by the traders who do not time their trades well, both when entering and exiting a trade. To mitigate risks and to allow the profits to run there is a need for an advisor who can guide you on how to become successful in trading the energy markets. A competent technical forecaster, and energy price and price risk analyst that offers short-term and highly accurate energy price forecasts are useful in this situation. The traders including businesses that depend on the price of energy commodities can benefit from hiring an experienced trading advisory firm that offers forecasts for natural gas, crude oil, and other energy commodities.

A good energy markets technical forecaster can be useful in many ways. This article will discuss why having a trading advisory firm involved that provides natural gas and crude oil forecasts may be useful.

Forecasts Using Technical Analysis are Based on Real Data

It is a universal fact that the energy markets tend to be volatile. If you have been watching the markets closely you know how true that statement is. Volatility is a challenge that tests the risk appetite of a company or individual trader. Moreover, it also creates the need to work harder and understand the market.

Another reality of the energy markets is the various kinds of speculation that goes around, which in most of the cases, is not based on hard data. Energy price forecasts based on technical analysis, on the other hand, are based on actual data. The primary idea behind technical analysis is that all information is discounted in price. Therefore, any action that makes price rise or fall will be displayed in the data on a chart. A technical analyst does not have to understand why prices are rising or falling, but rather the implications of such moves and how they will impact future price action. This is one of the ways that an energy markets advisor involved in technical market forecasting and technical analysis can be of use to the companies and individual traders.

Forecasts Based on Technical Analysis Reflect Reality

You may have seen many experts who predict energy markets. Can they predict the strength of the market or when prices will reach a given price level that they are calling for? Most of them cannot. This is because they don’t use technical analysis of the historical market data or compare the old market data with the current scenario. Technical analysis of market data is much more reliable in the short-term, and in some cases, the longer-term, than depending on forecasts which aren’t statistically or technically driven. Technical analysis is more effective in the short-term than fundamental analysis because it predicts the direction of the market and offers a highly probable strength of the trend.

Determining market direction is a very important factor in trading. A competent energy market advisory firm can come up with a good energy price forecast and share key information with you about whether the market is going up or down, but also if it is in a sideways corrective phase. This vital information received in a good energy forecast will help you in devising a well-planned strategy. In turn, this allows for making sound trade decisions that match your goals and risk appetite. Identifying the market direction and strength of the trend is not very easy, but a good energy forecast can play an effective role in making the task less difficult.

Conclusion

Hiring a trading advisory firm that provides energy forecast driven by technical analysis will help many achieve better trading success in the volatile energy markets.