For the past few days, the metals have been under pressure which was not unexpected. Over the past few weeks, we have been reversing our positions from short until long. We are now long Gold, Silver and Platinum.
When trend trading, we try to reinforce a few market facts, typically the first move from a reversal is to go against us first, in this case a small pullback to a major support level. This is the recent action we have been witnessing. We don’t get concerned when initially wrong, its part of the emotional preparation.
Mechanical trend trading is supposed to remove all emotion which is why our positions never change during the trading day. On any given day we can be wrong, but since we are not day trading it’s about the trend. Gold, Silver and Platinum are in confirmed up-trends which means we expect a much bigger rally.
Too many of us let our emotions take charge during the trading day. Current market conditions are thin with light volume and no liquidity. The Exchanges and clearing brokers have hiked margins eliminating many market participants which creates more exaggerated moves.
Check your opinions and emotions at the door, let the markets do their thing. Follow the rules to success instead of driving yourself crazy trying to interpret the news and opinions of others. Markets are never wrong, opinions often are. We hit 66%, that’s all we need to be very successful.