Although Gold is getting hammered this morning, based on yesterday’s close the trend has reversed to up. We will look at this as an opportunity to buy at better prices but buying we are doing. Our algorithm is based on the pit closing hours which was still higher yesterday even though after hours gold was lower.
Now Gold, Silver and Platinum are in uptrends although this morning’s action is ugly. Of course we are swing trading the paper metals which means we are in for days weeks or months. Unless a reversal is triggered we will hold our positions on either side, nothing but the algorithm will change our positions.
Now the big question, will the trend last? The answer depends on your time frame and capital position. Historically, Gold like equity markets trend higher over time. However, there are big moves in the short run that can trigger signals in either direction. What looks like a big move today over time barely registers on a long term chart.
You must decide on what type of trader or investor you want to be. You can do it all but must separate you emotions and opinions from the market. Buy physical for the long run and trade paper on either side in the short run
In all markets price action determines what will happen in the next day, week, or months. Keep the two strategies separate, the worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
Todd Horwitz Chief Strategist BubbaTrading.com
Stop being a prophet and make profits
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