TO THE SIDELINES
I took profits on my Gold long today as you can see indicated on the chart. I have mentioned I don't like the way Trade Station displays this but it is proof of actual trades being made so I live with it. Ironically today I had established a target of 1141 so I placed a limit order at that price. The exact high of the day was 1141 and I was filled, very unusual for a sell order to be filled on the exact high tick. Generally this means we are going higher. I did not exit because I thought this move was over, I exited because I had over $4200 per contract gain on a risk of $1100 so that is a very good ratio that I always monitor. You can just do the math for yourself, but if you make 4 times your risk, you don't have huge pressure on your win percentage to be comfortably ahead over time. The ratio is not always this high, but when I have a logical price target from my other tools, and it falls into the category of greater than a 2 to 1 gain over risk, I go with that every time. Here we had almost 4 to 1 which is even better.
I think this market will trade higher, but the easy money has been made, thank you!!! You can also see the short entry and exit which was my prior trade in this market which made about the same amount. I will now wait patiently on the sideline for the next move either way here. What I expect to happen is a further rally here and a decline in the dollar over the short term, followed by a big downward move in Gold and big upward move in the Dollar. I think these will start in the next couple of weeks but have no idea what day and won't try and guess. I will let my tools drag me in at the right time.
I have been trading stocks all from the short side this week and most might think, what a moron the market is going straight up. Hard to argue that on the surface, but let me show you a couple of trades I have done and you can evaluate how stupid they were.
I tried to make these the same size just for it to be more visually pleasing and it did not work, oh well. You can see that although the market is going slowly up almost every day, there are some stocks and sectors that are showing some minor weakness. For various reasons but mostly the seasonal down bias and various COT things, I am looking to trade the short side in stocks for the time being. I am only looking for short side trades right now. I am not trying to be a wise guy, or a dumb ....... but just taking the patterns and entries that I feel have a high probability of success. I do feel the big money trades in stocks and the indices are going to be on the downside this year. As a result I am aggressively pursuing short side trades in stocks for the time being.
Once we get to a spot that I think has good upside potential, I will change my posture and trade from the long side, just like I have recently done in GOLD.