Energy · MCX
Natural gas MCX buy and sell signals for a contract that moves in per cent, not points
Natural gas is the most volatile contract we cover. At ₹260, an ₹8 move looks small beside crude oil's numbers, but it is three per cent, and natural gas does that on unremarkable days. It answers to US weather forecasts and a weekly storage report, and neither of them cares what your chart looked like five minutes earlier.
WizeBuySell plots buy and sell signals on natural gas in AmiBroker or TradingView, each with an entry, T1, T2, T3 and a stop-loss, confirmed at candle close. The signal is the easy part. Most of this page is about position sizing, because on natural gas that decides how long your capital lasts.
Think in per cent, not rupees, on natural gas
With the price near ₹260, an evening 15-minute candle of ₹1.50 to ₹3.00 is 0.6 to 1.2 per cent of the contract. A Nifty candle on the same timeframe is usually a tenth of that. Small rupee figures hide how far the contract value is swinging.
A typical 15-minute signal puts the stop-loss ₹4 to ₹5 from entry. That is 1.5 to 2 per cent of contract value at risk on one trade, before slippage. The targets are scaled the same way: T3 can be four per cent away and still be reached before the close.
Traders who come over from index futures see a ₹4 stop-loss, think it is tiny, and buy several lots. That is the classic natural gas error. The stop-loss is not tiny. The price is just low.
Sizing a natural gas position from the stop-loss backwards
Do this before every trade. It takes under a minute.
- 01
Fix the rupee amount you will lose if wrong
A set, small share of your trading capital. Choose the number on a calm day, not mid-trade.
- 02
Read the stop-loss distance off the signal
Entry 262.40 and stop-loss 258.10 means ₹4.30 of risk per unit. These prices are illustrative.
- 03
Convert to rupees per lot
Multiply by the units per lot in the current MCX circular. The main and mini natural gas contracts have different quantities, so work out both.
- 04
Divide and round down
Your loss limit divided by loss per lot gives the lots. If it is below one main lot, use the mini. If it is below one mini lot, skip the trade.
- 05
Cut it further on Thursdays
Around the storage report your exit can be well past the stop-loss. Halving the quantity is a common allowance.
What a Natural Gas MCX signal looks like
| Symbol | Side | Entry | T1 | T2 | T3 | Stop-loss | TF | Time | Status |
|---|---|---|---|---|---|---|---|---|---|
| NATURALGASMCX | buy | 262.40 | 265.10 | 268.30 | 272.60 | 258.10 | 15m | 18:45 | T2 hit |
| NATURALGASMCX | sell | 268.90 | 266.20 | 263.00 | 258.80 | 273.10 | 15m | 20:15 | SL hit |
| NATGASMINIMCX | sell | 259.70 | 257.60 | 255.10 | 251.90 | 262.90 | 30m | 19:30 | T3 hit |
| NATGASMINIMCX | buy | 254.80 | 256.50 | 258.60 | 261.30 | 252.20 | 15m | 16:00 | T1 hit |
| NATURALGASMCX | buy | 257.30 | 260.40 | 264.00 | 268.80 | 252.60 | 1h | 21:00 | Active |
Illustrative rows that show the format, including a stop-loss hit. Not a track record. See how each level is calculated.
Weather, storage and the Thursday 8 pm candle
The US Energy Information Administration publishes its weekly gas storage report on Thursday: 8:00 pm IST in US summer time, 9:00 pm in winter, and off schedule in some US holiday weeks. The market compares the injection or withdrawal with the forecast, and the difference sets the first candle.
That candle is often three or four times the size of its neighbours, and the second candle frequently undoes it. Because a WizeBuySell signal is confirmed only at candle close, a signal produced by the report candle has an entry far from where the move started. Often the move is already spent.
Between reports, weather runs the chart. From November to March a colder US forecast lifts prices and a milder one drops them; in summer it is heat and hurricane risk to Gulf supply. Forecasts update through the day and over the weekend, so natural gas can trend hard for days and then turn with no chart warning.
What moves natural gas, and when it shows up on the MCX chart
| Driver | When (IST) | What the chart does |
|---|---|---|
| Weekly US storage report | Thursday, 8:00 pm (9:00 pm in US winter time) | One or two spike candles, often in both directions |
| Weekend weather forecast revisions | Monday, 9:00 am open | Gap up or down through Friday's levels |
| US session open | About 6:30 pm daily | Range expands; the day's first real trend |
| Cold snaps, heat waves, hurricanes | Seasonal, no fixed time | Multi-day trends of ten per cent or more |
| Contract nearing expiry | See the MCX circular | Volume shifts to the next month at a different price |
The near-month and next-month contracts can trade several rupees apart. Signal levels belong to the chart they were plotted on.
Gaps: the stop-loss that never gets a chance
US natural gas trades nearly round the clock. MCX is shut from late night to 9:00 am, and from Friday night to Monday morning. Opening gaps of two to four per cent are not rare, especially on Mondays in winter. If your stop-loss is 258 and the contract opens at 252, you are out at 252.
For that reason most natural gas trading with our signals is intraday, flat before the close. If you do carry a position, size it for the gap and not for the stop-loss.
Natural gas will hit your stop-loss more often than you expect
This contract whipsaws. A buy signal, a stop-loss, a sell signal and another stop-loss inside two hours is a normal bad evening, and the software has no way to know a forecast model has just changed. Signals read price; they do not read weather.
We publish no accuracy percentage for natural gas. What keeps a natural gas trader solvent is small size, a fixed loss per trade, and the discipline to stop after two stop-losses in one session.
Timeframes that hold up on natural gas
The 5-minute chart is mostly noise here; its stop-losses sit inside the spread-and-wick zone and get picked off. Fifteen and thirty minutes are the practical choices. The hourly chart gives cleaner trends, but an hourly trade usually means holding overnight, and that brings the gap problem back.
Before 5:00 pm IST the contract often moves less in six hours than it does in one evening candle. Day-session signals have close targets, and trading costs take a larger bite out of T1.
Questions about Natural Gas MCX
Why does natural gas hit stop-losses more often than crude oil?
Its percentage swings are larger and its reversals are quicker. Weather forecasts change several times a day and the price re-rates each time, so a clean-looking trend can turn in one candle. On natural gas, a run of stop-losses is part of the normal pattern, which is why small size matters so much.
Should I trade the Thursday storage report using a signal?
The software cannot help you with the release itself. It does not know the number or the forecast, and a signal confirmed on the report candle arrives after the spike. Stop-losses placed before 8:00 pm can be jumped by several rupees. Staying out from 7:45 pm until the second candle after the report has closed is a common precaution.
Main contract or mini for natural gas signals?
The signals plot on both, and the price levels are near enough the same. Choose by arithmetic: stop-loss distance multiplied by the lot quantity in the current MCX circular, against the loss you have decided to accept. For most individual accounts that points to the mini. Check the mini's volume in the late evening, when it can thin out.
Can I hold a natural gas signal overnight?
You can, and the 1-hour chart produces signals meant for that. The risk is the 9:00 am gap, which the stop-loss cannot protect against and the software cannot foresee. Mondays are the worst, after two days of weather updates. If you carry, carry a fraction of your intraday size and accept that the loss may exceed the plotted stop-loss.
Does the scanner cover natural gas along with my other MCX symbols?
Yes. In AmiBroker, add the natural gas contracts to the same watchlist as crude oil, gold and silver, and the Exploration scan lists the latest signal on each. Popup and sound alerts fire on the PC, and WhatsApp alerts are included on the Yearly and Lifetime plans. On TradingView, set an alert on the natural gas chart within your plan's alert limit.