There are several distinct camps with regards to the topic of forecasting energy markets, such as natural gas, WTI and Brent crude oil price forecasts. There are those that think forecasting the markets with any sort of precision is impossible, a practice based on false expectations. Then there are the individuals who think that the energy markets can be precisely predicted ahead of time, and share stories about traders of the past as an evidence that it should be possible. Finally, there are those that fall somewhere in the middle, trusting that Market Forecasting with a high level of accuracy, though not with 100% accuracy 100% of the time is achievable and can be done with the right techniques.
For many, the author included, a energy forecast works a lot like a good road map. It will tell you where the market is going, the various paths that it can take, and where potential turning points are. However, a road-map alone can’t get us from point A to B. For that, one must also have a vehicle, which for traders includes charts, technical analysis, indicators, and other data.
With that said, this article’s main focus is not on whether accurate energy forecast is possible but whether it is worth the trouble.
Technical Analysis: Indicators and Oscillators
If anybody will take the time to work up a market forecast, then obviously that individual will have discovered techniques and methods and have proven to be exceedingly reliable for that very purpose. We can all concur that no single strategy or system will be 100% accurate 100% of the time. However, if a forecasting tool can create a large amount of valuable data alone or combined with other techniques, it will be worth the time it takes to derive.
Traders who know about Technical Analysis are likely acquainted with the concept of divergence, such as in 'bullish or bearish divergences' found using momentum oscillator indicators. Clearly divergences are not going to be employed to forecast ahead of time what day or week the market will make bottom or top. Nonetheless, it is a forecasting technique of sorts, in that it can allow the trader 'predict' whether the market is going to change trend.
The same can be said of Fibonacci wave projections and retracements. These techniques can help a trader determine market direction, trend, profit targets, and potential stalling points. When combined and confirmed by other factors such as momentum divergence, candlestick patterns, or geometric formations, one can gain a deeper insight into the markets and figure out ways to time more profitable trades.
The fact of the matter, understands 'divergences', Fibonacci targets, or any number of other factors clarity is viewed as 'worth the trouble' to even the persons who don't buy the idea that a market forecast is accurate. The persons who has never analyzed price action for any of these factorsare obviously going to be doubtful that it is of any worth, until they put that distrust aside by seeing how effective that basic technique is in making an accurate energy forecast. The same can be said in regard to other types of energy markets forecasting. This is the reason it is 'worth the inconvenience' to explore and learn.
Conclusion
If the objective of the trader is to gain a deeper insight into the market so that they can make more timely and accurate trade decisions then it is worthwhile to learn everything you can to get that going. Markets Forecasting is a procedure that falls into that category.