Here is Why People Lose Money Trading Natural Gas

[Zhong Lu + 845]

U drops 10% (3x Natural Gas ETF). Do they sell? No. Because they don't want to sell at loss.
Drops another 10% the next day. They're paralyzed with indecision.
Goes up 5%. They celebrate. Promise themselves they'll stay away when they break even.
Drops 10% the 4th day.  They're so f-ed they don't sell because to do so would be to admit to themselves that they're a moron.

Etc. 

Frankly, if a person took out a dartboard and threw darts to decide whether to go long or short on natural gas on any given day for a month, they'd break even.  I know from personal experience because I tested it.

Losing money has nothing to do with gambling. People lose money because they BAGHOLD.  

They don't sell on that first day.  

Edited January 24, 2020 by Zhong Lu

[Zhong Lu + 845]

If selling at a loss is difficult for you, get some practice.

1. Buy a dartboard.

2.  Blindly throw a dart at the dartboard.

3.  Even= go long on S&P or UNG or whatever that's not a penny stock and has liquidity.  Odd = go short.

Do it for a month.

By the end of it you won't feel anything when you sell at a loss.  And you won't lose any money from that lesson either (chances are you'll break even, unless you happen to be the unluckiest person in the world- in which case you've learned that you shouldn't trade because you've been cursed with unluck).  

Edited January 24, 2020 by Zhong Lu

[George8944 + 128]

On 1/23/2020 at 7:13 PM, Zhong Lu said:

Losing money has nothing to do with gambling.

I agree,  gambling isn't so much the problem as not understanding your risks.  I don't think you have enough data points to prove or disprove your dart board theory.  A couple thoughts.  Did natural gas move sideways for the month you tested?   I don't day trade or take positions for only a few days (with the exception of a small dollar position in options).   You are a very brave person with your money.   If you're guessing at the daily movement of the futures market, you should go into weather forecasting!  

[Enthalpic + 1,496]

On 1/23/2020 at 5:13 PM, Zhong Lu said:

U drops 10% (3x Natural Gas ETF). Do they sell? No. Because they don't want to sell at loss.
Drops another 10% the next day. They're paralyzed with indecision.
Goes up 5%. They celebrate. Promise themselves they'll stay away when they break even.
Drops 10% the 4th day.  They're so f-ed they don't sell because to do so would be to admit to themselves that they're a moron.

Etc. 

Frankly, if a person took out a dartboard and threw darts to decide whether to go long or short on natural gas on any given day for a month, they'd break even.  I know from personal experience because I tested it.

Losing money has nothing to do with gambling. People lose money because they BAGHOLD.  

They don't sell on that first day.  

Those 3x ETF's are not supposed to be held for more than one trading day.

[Zhong Lu + 845]

One or two trading weeks.  

They can actually be held longer but only if you're making money.

Edited January 27, 2020 by Zhong Lu

[Zhong Lu + 845]

15 hours ago, George8944 said:

I agree,  gambling isn't so much the problem as not understanding your risks.  I don't think you have enough data points to prove or disprove your dart board theory.  A couple thoughts.  Did natural gas move sideways for the month you tested?   I don't day trade or take positions for only a few days (with the exception of a small dollar position in options).   You are a very brave person with your money.   If you're guessing at the daily movement of the futures market, you should go into weather forecasting!  

June 2018- July 2019.  UNG (not UGAZ).  So it was sideways, ultimately, despite volatility, but even if it was going down I don't think it matters because you have a 50% chance of shorting it on any given day.