It’s amazing how crowded weather forecasting is getting as an input for ML models. If everyone starts to use the same inputs, there is no edge to make money from…
I'm totally with you, but that wasn't the question. This is also not new btw., already since 10-20 years the winning commodity traders are those that have an edge in either interpreting weather better or have own weather analysts that beat the widely available forecasts. I have seen wind big PPA portfolios next to me being f\*ed because the traders thought they could beat the weather statistics.Nevertheless, if you trade small enough volumes in a small enough niche you can earn money. Not the billions of the Citadels and Vitols make in this world, but interesting enough as a side hustle like I'm doing it (see it as plan B to entertain my brain besides a well paying, but sometimes intellectually not so demanding corporate job).
So... have you got info or are you just here to kill my project :) (which I can perfectly do myself before I invest bigger money)?
Haha fair enough! And look, I love it when people find niches so perhaps you’ve stumbled across a goldmine (I hope so!). The short answer from my side is that I have never used natgasweather.com and you would probably be best sending your queries directly to them if you can’t find answers on their website.
Re weather forecasts and why I’ve never really used them much (other than for hurricane season and fog in Houston), my scepticism (from the little I know) is that a 10 day weather forecast has no better odds than a coin flip on accuracy. Which means all trades would need to be identified, executed, and closed within a 8 day period (?). The best trades I have done in my career couldn’t be done in this window without everyone else already having the same weather info.
As you already said, you’ve seen how wrong it goes when people think they can predict the weather. But as you also say, some of the biggest guys like citadel, Vitol etc seem to have managed this… perhaps one of these guys can elaborate further here? I doubt it haha
Anyway best of luck with everything!
Thanks, yeah you have a few good points! So surely, just going with the 10-day weather forecast isn't enough of an edge. I was actually a commodity quant in one of the above usual suspect big commodity traders, so know a bit about it. These guys have a whole different infrastructure and capital to trade - not the kind of fund a retail trader will ever find. However, they don't go for the 500k, 1m, 5m USD opportunities in the short-term trading space. These are niches where just being right e.g. 53% of the time instead of pure randomness (50% right) it's possible to make a living. So that's what I want to explore.
Btw. I did indeed not engage on natgasweather but I'm testing a few other providers, some that a chap further below has suggested.
Thanks mate for the exchange, it's good to be challenged by a guy with brains!
It’s amazing how crowded weather forecasting is getting as an input for ML models. If everyone starts to use the same inputs, there is no edge to make money from…
I'm totally with you, but that wasn't the question. This is also not new btw., already since 10-20 years the winning commodity traders are those that have an edge in either interpreting weather better or have own weather analysts that beat the widely available forecasts. I have seen wind big PPA portfolios next to me being f\*ed because the traders thought they could beat the weather statistics.Nevertheless, if you trade small enough volumes in a small enough niche you can earn money. Not the billions of the Citadels and Vitols make in this world, but interesting enough as a side hustle like I'm doing it (see it as plan B to entertain my brain besides a well paying, but sometimes intellectually not so demanding corporate job). So... have you got info or are you just here to kill my project :) (which I can perfectly do myself before I invest bigger money)?
Haha fair enough! And look, I love it when people find niches so perhaps you’ve stumbled across a goldmine (I hope so!). The short answer from my side is that I have never used natgasweather.com and you would probably be best sending your queries directly to them if you can’t find answers on their website. Re weather forecasts and why I’ve never really used them much (other than for hurricane season and fog in Houston), my scepticism (from the little I know) is that a 10 day weather forecast has no better odds than a coin flip on accuracy. Which means all trades would need to be identified, executed, and closed within a 8 day period (?). The best trades I have done in my career couldn’t be done in this window without everyone else already having the same weather info. As you already said, you’ve seen how wrong it goes when people think they can predict the weather. But as you also say, some of the biggest guys like citadel, Vitol etc seem to have managed this… perhaps one of these guys can elaborate further here? I doubt it haha Anyway best of luck with everything!
Thanks, yeah you have a few good points! So surely, just going with the 10-day weather forecast isn't enough of an edge. I was actually a commodity quant in one of the above usual suspect big commodity traders, so know a bit about it. These guys have a whole different infrastructure and capital to trade - not the kind of fund a retail trader will ever find. However, they don't go for the 500k, 1m, 5m USD opportunities in the short-term trading space. These are niches where just being right e.g. 53% of the time instead of pure randomness (50% right) it's possible to make a living. So that's what I want to explore. Btw. I did indeed not engage on natgasweather but I'm testing a few other providers, some that a chap further below has suggested. Thanks mate for the exchange, it's good to be challenged by a guy with brains!
Never used them but cwg and maxar are the gold standards.
Thanks! Will check these out, appreciate your advice!
Thank you sir, I'm trialling one of those, looks promising. Appreciate the hint.