So you wanna trade… Step 2

  • The agenda
    • Order Progress (Working, Filled, Cancelled, Failed)
    • Order Types (Market, Limit, Stop, Stop Limit, Trailing Stop)
    • Positions
    • Account balance details

So much to cover, ok, breath… Here we go. In the last lesson we placed an order. Since the order was placed while the market was closed (on a Sunday), the order went to the working orders window. Understand I do not write this kind of info for a living and I may not be good at it. Also know I’ll do my best to answer any questions if you have any.

Order Progress

The working window… I have pulled the working window up in front of the others to see clearly. When you enter an order and click the “Paper Trade” button to make the trade, this is where the order will go. Back to our example, we bought UNG; if the market were open and we entered a price at, or a little above the last price on the chart… The order would go from “working” to “filled” fast enough it may never appear in the working window. So this is where an order sits while waiting to be traded with someone else on the market. Whether it’s the stock market or futures market, an order will be “working” until it gets filled or cancelled or failed.

It is important to know that sometimes the order gets filled and it may take a minute for the website to update this.

Lets walk through each category in the working window. The symbol is what you wanting to trade, simple enough. The name is actual name of what you’re trading. If you were trading Wal-Mart, their name would appear in this column. When referring to UNG/UGAZ/DGAZ, almost everyone on the planet will refer to them by their symbol. The side column shows if you are buying or selling. Total Qty is the number of shares you are trying to buy or sell. IMPORTANT. if you are buying say 1000 shares, part of the order can get traded and it may still be working on the rest. This is normal and when you are trading a limit type order, this can happen quite often. If an order is “partially filled”, the working window should show the rest of what is still trying to buy. If you place a limit order, the price you choose should show up here, same with a stop order (the price of your stop should show up under stop price). Order Type will be covered in a moment. TIF is Time-In-Force. This can be two things, Day or GTC. Day means the order is for that day, only during normal market hours (9:30AM – 4:00PM Eastern Time). GTC mean Good-Till-Cancelled. That means the order will remain working each day during normal market hours, until you cancel the order.

A Day order that is placed before the market opens, like midnight the night before or on a Saturday or Sunday. That order will remain working for the next time the market opens and will either be filled or cancel at the end of that day when the market closes that same day. If say Monday is a holiday and the market never opens, the order will still be working until the market opens and then closes. If you place an order during the day when the market is open, that order will close at the end of that day.

Extended hours! with Webull extended hours are from 4AM – 8PM ET. Limit orders are the only types of orders that can trade during extended hours. We’ll get to Limit orders. I don’t know why only limit order during ext hours, probably the government. Last column is Order Placed, this is the time and date you placed the order.

There is no reason to look at each tab in the orders window, it’s basically the same info on each. When an order is filled, meaning you bought or sold to someone on the market, your shares will show up in the positions window and the order will move to the Filled tab. If you right click on an order in the working tab, you will have the option to cancel the order. This should stop the order before it gets filled, emphasis on should. Sometimes the order goes through and you aren’t fast enough to cancel it. If you do get it cancelled, the order will then move to the cancelled tab and has no chance of filling. As for Failed orders… This doesn’t happen very often and I don’t know all the reasons why an order will fail. Just be aware that it does happen and the best way to know why is to see if there are details listed with the failed order or contact the broker to learn why an order was cancelled.

Order Types

I had to switch to the Trade tab on left side to show four order types I wanted to cover. I guess paper trading only allows for Market and Limit types. That being said, the four types are as follows by my own personal definition.

Market order – You are going to buy/sell your shares at whatever the price that is at when the market is open ( not extended hours, between 9:30AM and 4:00PM ET) You can place a market order during extended hours, but it will not trade until regular market hours.

Limit order – If you are buying and you want to wait and see if the price will drop down, you can set a limit price where you want to buy, if the stock price moves that low, your order will fill. If you are a seller and you want to wait and see if the market will rise, you can set a limit to sell higher and if the price gets that high, your sell order will fill. Limit orders are the only orders that will trade during extended hours and regular hours! If it is extended hours and you want to buy NOW! you might place the limit order a few cents above the current price to make sure you get it NOW! If you put your order in to buy above the current price, that lets the market know you are willing to pay a little extra to get in now. Same with selling, but you would sell for a few cents less than the current price in order to sell out. Extended hours are different with every broker; Webull is the only one I’ve seen to start at 4AM ET. without special permission (extra money)

Stop order – If you are holding shares and fear the price of your shares may drop. You can set a Stop to sell if the price drops to the price you set in the stop. The reason for this usually is because you think if the price drops some, it may keep going down. The stop order will sell your shares at the price you set so you don’t lose even more. Stops are tricky. The price may fall and you “get stopped out” and then the price turns around and goes up and you miss out on making money. This will be covered more in future lessons.

Stop Limit – I never use this…. A stop limit has two prices, a price you set just like a stop order; a Stop price so if the price falls, the order is activated. Then a limit price that you want to sell at or above that price just like a limit order. This is confusing as all hell because a stop is to sell if the price falls and a limit is to sell if the price goes up. So yes, you are still stopping out because the price is falling, but you don’t want to get ripped off by the price falling too fast. If you don’t understand don’t worry about this one. I don’t understand why anyone, other than those trading tens of thousands of shares, would use stop limits. If you are trading tens of thousands of shares, you shouldn’t be here.

Trailing stop – This is not listed on Webull, but they may offer it some day, so I’m going to talk about it. So you place a stop if the price falls, what if the price goes up a lot then falls. Then your stop is still down really low. A trailing stop will follow the stock price up and stay behind it by a certain amount. Like 1% If the price of UNG is at $20 and I want to “trail” it by 1% (which is 20 cents). When I set the trailing stop at $20, if the price drops, it will sell at $19.80 or 20 cents down. If the price makes it’s way up to $21 then falls, the stop follows the current price higher and stays 1% below and will now stop out at $20.79 or 1% down.

My examples have been for selling, but they can also be used for buying, just in the reverse direction. If you are using a stop when selling you are assuming the price might fall and you want out before it goes too far down. If you are using a stop when buying, you are assuming the price is going up and want to buy before it goes up too far up and miss out.

Postions

Again, I’ve brought the Positions window up in front of the others in order for it to be seen. Positions are what you are currently holding shares of. The example I want to show is UNG in the image below. If I buy 100 shares of UNG, it will show up in the Positions windows. If I buy 100 more shares, this will add to my UNG position and 200 shares will show up in the Positions window. The positions windows will calculate the average of UNG each time I buy and tell me the average over all. This could also be considered a “break even” price. If the current price of UNG is above “my average” then I’m making money; if the current price of UNG falls below my average, I’m losing.

Understand this average price needs to be understood by you, and do not take lightly what is shows on the screen. If you buy and sell small amounts, this average shown on the screen may be incorrect. The broker may not keep track of the average the same way you want to keep track of it. There are different ways to keep track of your average, and needs to be discussed soon.

Balances/ Account Details

Lets try to keep this one simple. Webull starts you out with a million dollars. Overall P&L is how much you make or lose once you start trading. P&L stands for Profit and Loss. Market Value is the worth of your current positions. If say the price of UNG goes up, my market value goes up. Buying Power is the amount of money I have to spend on buying more stocks. Day P&L is the Profit/Loss for that day. Since it is early morning and the market isn’t officially open yet, this number may change when the market opens.

Holy cow I hope this wasn’t as boring for you as it was for me. I suggest taking a break before the next lesson.

Oldinvestor

As a extra note. If you accidentally delete one of the windows in the paper trading section of Webull, just click on the little suitcase at the top of the screen to get windows back. The trade window is under “Stock” Also to the right of the suitcase, the “Paper Account” tab shows your account and a bunch of details I’m not going to get into.

SSDD, waiting for the breakout

NG1! Oct 23, 2019

So Adam Mancini on Twitter believes we break out for a move up around 2.4 I’m long, so I like this idea, and I wouldn’t make it a habit to bet against Adam. He has very clear and concise goals when it comes to technical training, he’s just damn good at it. That being said, market sentiment is still weak, weather has been bullish so a surprise would be bearish, and oversupply still exists in a big way, hence the market sentiment. That’s a lot of commas momma. I’m just waiting for a significant break in one direction or the other outside of these trend lines. I may pittle around with some small long trades in the range if somehow the wedge doesn’t stay true. Any significant break below the lower trend, I will again add at lower BB and wait for either $2 gas or another significant signal that may come along. So far I’ve been pretty focused on daily charts and daily updates. This will probably remain for a while. I’ve got a guinea pig to help me start working on super basics. We’ll see how that goes.

Daily update

First up, I’m not feeling the greatest, this always affects my ability to think.

NG1 Oct 22, 2019

Basically weather is still leaning bullish, Short positioning seems to be still in the mood to be setting records, and Pricing is back down around lows. Production got adjusted up yesterday by PointLogic. They do that every once and while. Basically gas production has been a little higher than what they were expecting. This increase in production is probably the most bearish factor and a key reason for prices failing so far this week. Not to mention, when prices continue to fail to go up during bullish weather forecasts, look out below. If weather is supportive of higher pricing and higher pricing doesn’t come… Weather can’t stay colder than average for long, eventually it will reverse and prices may suffer if they are only holding a range with bullish weather.

I have a couple of trend lines showing on this chart above, this could be tight support today, I’m not counting on it, but I am 27% in $UNG again. I will continue to layer in with each leg lower. Remember $UGAZ will slaughter you in winter with natural decay and roll decay. $UNG will sustain this much much much (3x) bettererer.

NGZ19, Oct 22, 2019

I drew a little different trend line pattern for Dec contract. I would be inclined to believe this one. A wedge pattern that I don’t really know what to expect from there. Weather might actually play a role, in either direction. If we continue to be cold for the next couple weeks and are projected to be cold from that point, maybe gas could break out upwardly. In an oversupplied market, cold has to work much harder than people understand. On the flip, if cold gives up and weather is average or warmer than average, gas could break down, rubbing on that lower BB. I’m still a believer in sub $2 gas and bankruptcies, and all that goes along with this… Including a huge swing in S/D and pricing if it comes to that. Oil is beginning to suffer, maybe we’ll get a repeat of 2014/15/16. Now I’m just rambling… I’ll add again if we reach the lower BB on Dec contract and I’ll reduce back to 20% if we get to that downward sloping trend line.

Happy Trading

Daily, last ditch or boring friday

Gonna make this quick. Looks like we bounced from 38% Fibo yesterday, good area to reduce slightly. Today has a pretty tall upper wick, it’s not looking good for a breakout at this point. Weather is still predicting cold, LNG showing to hit a new high, but EIA confirmed the market still far oversupplied to get very excited. Since that last barrier was not broken, no “off to the races” signal for bulls. So first thought here is, we creep back down and re-test new lows, possibly 2.1 for Nov contract if it doesn’t end first. I call it boring friday, because tomorrow is shaping up to be just that.

Down foreverly… NGZ19

Doing my best to muck up this chart. Technical analysis is not my strong point, but I am learning slowly. Seems like I successfully called for a bear flag last week, week before? Would you look at that…. A bear flag. So for my further bearish argument I have an if. I have drawn all over this Dec contract chart and decided that IF we break down either today or next week from the current price of…. 2.41ish, then weak support may exist around 2.34. Once the price smashed through that number next week we head straight for 2.20 – 2.23. Granted, we head down quickly and catch up to lower BB while running into major trendline down around that area.

That being said, I’m now 33% or so in $UNG and will remain so with an average just below $20. I have a bad habit of falling knives and such around this time of year. I like to think I’m still doing it wrong, I’m just wearing thicker gloves this go around. In years past I’d have been all in and squirming, looking for a way out, not wanting to take a major loss and eventually doing so. I’m all of 2.1% or so down on my account today, I’ll take it for now.

That being said, what’s to turn this thing and make it go up? Hell if I know…

What we do know:

  • The price is pretty low, but has a couple legs left
  • Managed money positions are approaching record shorts again for the year (short sided positions are quick to cover)
  • Producers have already said they are cutting back on new activities (hearing little bits all this year)
  • Long term weather is UNPREDICTABLE!
  • NG even in 2015 is full of bear flags to scrape a little in and keep averages low
  • UNG never recovers from Oct 2015 prices, but if kept manageable, can be easily worked out of.
  • UGAZ decays into oblivion, unless you plan to roll it around a lot, just don’t, not yet…

I’ve been sick with what seems to be a cold forever now, beginning to think it’s Mononucleosis. To my 0 readers so far, I’m sorry I haven’t posted much as of yet, also for the low quality of this post. I reserve the right to be completely wrong and talk in circles. Have a great weekend.

I get it now… Salt and Deliverability

For the last few years I’ve heard this argument about South Central Salt Storage. South Central is a region of the US for Natgas storage and Salt would narrow it down even closer to salt caverns. The south is a dominant area for Natgas flow and any disruption in storage could potentially cause a disruption for much more than just this single region. As we’ve seen in the Permian lately, Natgas pipeline infrastructure capacity can become limited. So the argument goes, Supply/Demand has grown substantially in the last few years yet storage capacity remains the same. Even though production has surpassed (what I would call) structural demand by upwards of 3Bcf/d lately, Salt storage is presently 48% full.

Natural Gas Storage Dashboard – EIA.gov

We see that salt is hardly keeping up with filling capacity when compared to other regions of the US. Back to the argument that it is not filling enough; therefore come winter, this region of storage could run out. When comparing supply and demand on the national level, this year is beginning to look like we will not possibly run out of storage, even in the midst of a cold winter. If one of these 7 major regions were to run out of gas, we would have that similar problem that Permian is having right now with getting rid of supply. There just is not enough pipeline capacity in all directions to move gas where we want when we want, which is the point of having enough capacity in each region. Granted, 5 year minimum for Salt storage has not dropped below 108Bcf, the last time this region experienced much in the way of a cold winter was 2014. At that time supply and demand were both much lower and the infrastructure at that time may have been more up to the task of moving gas more on demand.

I’m going to end this by sharing an article written by a reservoir engineer, posted on Oilprice.com Dwayne Purvis, makes a strong argument for the need for greater storage capacity. This is a test article so expect many mistakes and biased opinions.

https://oilprice.com/Energy/Gas-Prices/Natural-Gas-Prices-Poised-For-Dramatic-Price-Increase.html

First Test post by Oldinvestor

Testing posting a chart from Desktop.

UNG October 1, 2019 Approaching some levels of Technical support

The idea here is UNG as well as NGX19 is at a support area. Previous close is at trendline, as well as 61.8% Fib. UNG has already crossed below 50day SMA and I fully expect it to continue lower… Test complete