Adam-Cox

Parabolic Growth - Never Chase Price!

NYMEX:NG1!   Natural Gas Futures
Parabolic Growth - A Quick Note

Positives parabolic growth rates occur when both Growth is positive, and the Rate of Change is also increasing - the 2nd derivative is increasing in calculus terms. Obviously, the rate of geometric growth can only increase so far, otherwise price change would increase infinitely!

Parabolic growth on daily charts and lower time frames eventually gives rise to periods of retracement and/or sideways consolidation. We have seen this in cryptos ( BTC 's first major bull run) , many other futures contracts and even stocks. This phenomenon can be identified even in charts going back to the 50s and 60s.

Lesson here?
- Never chase price!
- Wait for a pullback and/or consolidation phase. You don't want to be the noob that buys at the top!

- Understanding the phenomenon mitigates the risk of lack of self control and feelings of FOMO.

Adam Cox, SFFIN, MFTA