If you understand trading versus investing, then you should understand price action. Unfortunately, too many put their opinions above the facts. Fact, in the short run markets go up and down, sometimes trending for extended periods.

Over history most markets go higher. The precious metals are a great investment but trading them is completely different. As an investment, you should never own paper gold or silver, only physical metals. Conversely when trading you never trade physical you trade paper. This gives you a slight edge on both trades over time.

We remain short gold and silver with the trend lower. 1880 is a new resistance level in gold with it sitting on support with a high probability to see 1800. Silver is at resistance of 22.00, with support at 21.5 and then 21. Our positions can change any day but never during the trading day.

Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper knowing that we can trade either side without emotions.

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
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