Short term Power Trader: weather sensititity

doudounovic's picture
Rank: Chimp | 6

Hi all !

I am a Junior Power trader (prop only) in a small european boutique ! I trade power in different countries on a short term basis (days and weeks).
On this time frame, weather is king ! I have basis in weather understanding but I can't properly explain a move from one forecast run to another - which seems normal as super computers run half a day for each run...

I look everywhere for other forecasters than ECMWF and GFS, other sources that do their own forecasts based on the original inputs of EC/GFS etc. in order to tale a position when one is very different from another.
However, it seems more like a random process than anything else to predict the next move of weather forecast (especially the wind...)

What do you guys think ? Is this a good way to trade the short term power ?

Happy to share on my little exp if you have any question !!

Comments (5)

Apr 2, 2019

Hey doudounovic, what a lonely thread. I'm here since nobody responded maybe one of these discussions will help:

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  • More suggestions...

I hope those threads give you a bit more insight.

Apr 5, 2019

weather is a commodity - ecmwf is the best, GFS is a POS. Honestly weather wont give you and advantage, everyone is the same and everyshop has the same vendors - find a different way to give your self an edge

Apr 6, 2019

Hi nattyphizz ! Yes I totally agree with you... Everybody is given the same info !
But if you trade the very short term, only weather changes creates moves !

I try to evaluate the risk, like wind is very high, I think next move has higher prob to see the wind decreasing... But nothing really reliable you know !

Apr 6, 2019

It seems a good strategy. Considering also Samuelson effect for longer maturity and you are talking about short term trading
Power is classic example in stochastic processes examples with mean reversion and jumps, thus it comes quite hard to predict future prices

Apr 8, 2019