Most important points for Natural Gas Trading.
Please remember this very important point: In the last 35 years of Natural Gas (NG) futures charts — from April 1990 to October 2025 — NG has never been able hold on to higher levels above $5 for any longer duration than 3-4 months, because the Natural Gas production keeps rising rapidly often outpacing the demand, so the NG prices remain between $2-4 per MMBTU for most of the time, with $3 per MMBTU as the long term support level. That rate seems to give enough profit for the Natural Gas producers to remain profitable. So at higher rates like $7-8, the Natural Gas producers themselves become big sellers of NG futures, to lock in the higher rates, because they know that NG production will rise rapidly at higher rates, which will take NG rates down.
So when you see higher rates like $6-7 per MMBTU or more, you must take profits on your long positions and become very cautious with fresh new long positions. Above $5, it will be a very bullish sentiment, and trading gains can come rapidly in that zone. Keep your position size in control. Work with strict stop losses, to avoid large losses from sharp corrections.
NG has not been able to hold any rates above $5 for long duration. Any price spikes above $5 would most probably be due to short covering or market technical reasons, and not fundamental reasons, because the supply of Natural Gas keeps rising to meet demand. Experienced traders can consider selling NG futures at rates above $7 for the inevitable correction back to $3.
Remember this: NG is not Gold. NG has no appreciating property.
NG is closer to Oxygen, and even more abundant than Crude Oil.
Everybody needs Oxygen but you can’t command a big price for it.
The best way to make money for Natural Gas Trading is to work month to month, and live in the present, focus on the current technical setup and trade accordingly. Don’t predict the future, and don’t look too far. Trade for this month.
The inherent volatility of NG futures is a big opportunity for traders. Holding NG won’t make you rich, but trading NG can surely make you rich. Thanks. Wishing you all the best!