Confession is Good for the Soul
Well it is time to fess up on a major blunder where I let my ego get in the way of good trading practices. Readers here know that I have been bearish metals for a bit and been wrong. I have made a couple of short trades in Silver and made some pretty good money, but missed the big opps on the long side. I suppose I could say I am just an idiot, but I follow strict rules and those rules have told me to look for sells not buys. As a result I just have not traded this market much, none on the long side in the last 2 months.
I had mentioned the other day that I was starting to build a short position in ETF's for Silver, ZSL to be precise. I made the decision this am after actually adding to it, to bail the whole thing right about where my add on was done. Seems strange to be building a position for a long term anticipated large move, then exit literally the next day. Why would anyone do that?
You can see the clear break out on this chart which led me to bail along with something else which I have written about in here at length. Although there is a potential sell signal right here in stocks, it requires a break down to trigger which does not appear likely. Since stocks are controlling the whole world right now it is my judgement that even though I think this market is a textbook sell setup, as long as stocks do not break metals are not going to either.
We have a tight consolidation sideways going on in the indexes, which appears to me to be a continuation pattern more than a reversal pattern. I will be prepared to short on a false break and reversal. However, since metals are tracking stocks dead on, it makes no sense to look for a big break here until stocks break. With this breakout that just happened who knows how far it could go. It could reverse right here and it if does I will re-enter immediately without a second thought.
I made the mistake of not waiting for a sell pattern in the futures market before taking a positon in the ETF's. I should know better by now, but I let my ego get in the way. Once I realized that I puked out immediately and took a small loss on the position. I never take big losses, they are just too hard to recover from both mentally and physically. If I wind up going right back in so be it, but there is still potentially more room to run here and there is no sense getting run over for a 50k loss due to ego.
It tomorrow were to take out todays low which is not likely without a stock market crash, that would be a trap pattern for a short entry and I will be a player there if it happens. Until then I am going to set my ego and what the commercials are doing here aside and wait for a correct entry pattern.
By the way the Bean Oil trade I had mapped out for today never traded down to the fill price, hence the trade was not entered.