NG tends to march to its own drumbeat, quite often with little correlation to the stock market although at times it does trade fairly correlated to the stock market when stepping back & looking at the larger trends (see chart below). Either way, I like to trade it based on its own technicals with giving little, if any weighting on what oil or the stock market is doing, especially in & out swing trades lasting just days or weeks, as I suspect this one will be if it pans out.

A buy-stop order is a standing order (either a Day order or GTC) that will immediately convert into a market order if & when the security hits the buy-stop price. E.g.- One could set a buy-stop order on UGAZ at 45.73 & then walk away from there desk (or go back to work). If & when UGAZ trades at or above 45.73, the buy order will execute.

The advantage of a buy order is the luxury of having the order automatically trigger if your entry price/criterion is hit even if you are away from your desk at the time while on potential downside is the fact that a large opening gap above your buy-stop price would trigger the order at the opening price, which may be well-beyond your intended entry. A buy-stop limit order would only be filled at a specific price (the limit price) if the buy-stop price is hit, although a potential downside to that type of order is the risk that the order would not be filled, should the security quickly move beyond the stop-price.

Another order type that I highly recommend is called an OCO or OCA (one-cancels-the-other) or (one-cancels-another). Once you have taken a position, you can set an OCO order with two orders: A sell limit order at your price target and a stop-loss order at your stop price. When the first of the two orders is filled, the other order is automatically canceled. This allows one to take a position, set the OCO orders and then sit back (or walk away from the computer). Your trade will either hit your price target or your stop-loss so in addition to the benefit of not having to be in front of your computer at all times to manage the trade, one of the biggest advantages to OCO orders is that it provides the discipline that many traders lack. It basically forces you to stick with your trading plan (although it can be canceled or modified at any time) without second-guessing every move against your position which might cause you to pull the plug on the trade early. Make sure to set the OCO order GTC (good-’til-canceled) and not a day order unless you are day trading.