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How Effective Are Energy Forecasts Based on Technical Analysis?

The instability and volatility in crude oil and petroleum product prices occur when a certain event or events upset the balance of supply and demand. Political upheaval in oil-producing countries or large-scale weather events leading to disruptions in supply is just two of many types of disruptions that can take place. Due to volatility in the energy commodity markets, it becomes hard for the individual traders or companies who trade crude oil futures to accurately predict the prices in the coming days, weeks, or months. In this situation, using technical analysis is one of the best tools for all market participants. In this article, we will analyze how technical analysis based short term energy forecasts succeed when it comes to energy trading and risk management.

Technical Analysis Based Weekly Forecast Is Highly Accurate

As mentioned, geopolitical and other factors and their effects on crude oil, gasoline, and other petroleum product prices are very difficult to predict. However, charts discount everything, so if it has an effect on the market it will be reflected in a technical analysis based weekly energy forecast made by a professional technical forecaster. In technical analysis, the prediction of commodity price movement happens using charts and graphs along with various mathematical and statistical methods. Simply speaking, technical analysis involves studying price fluctuations, and through those changes and the patterns that form, a short-term energy market forecast is achievable.

Hence, a technical analysis based forecast gives highly accurate near-term outlooks for WTI and Brent crude oil prices, including probable direction and strength of direction. These forecasts are also effective in figuring the most important support and resistance levels. In this way, traders who rely on these forecasts to plan their trading and hedging strategies can make informed decisions that match their risk appetites and goals.

Technical Analysis Based Weekly Forecasts Allow Making Informed Decision

Anyone who trades energy commodities or whose business is directly connected to the prices of energy products is always concerned about sudden fluctuations in prices and the risks that follow every trade they make. Moreover, their attention is on how to mitigate the risks and how to take advantage of the market’s volatility. They can rely on the near term outlooks of energy prices given in a forecast to carry out short term trading and maximize gains while reducing the average buying cost. Short term trades are important in the sense that they allow traders and investors to build the right positions for the long term.

Conclusion

Highly accurate short term energy forecasts are effective in making informed trading decisions, to help mitigate risk, and to allow profits to run.

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