THE SHARK ZONE

                                   There’s Danger Everywhere

You’re sittin’ there just mindin’ your own beeswax and BAMMMMMMM!

“Whoaaa, where’d that move come from? Geesh, I’m just tryin’ to make a little cashola here, and outta the blue here comes a $6 drop [or rise, whatever the case]. Where did that Gold Shark come from?Heyyyyy, I’m missing my legs!!

Welcome to Gold Shark trading.

As I said earlier in my other post, just 3 candlesticks on the 5M represent 80% of the daily range in gold. The rest of the day? A bucket of slop.

A somewhat different story in AUD, as the market put in a nice 100+ pip move before topping and rolling over.

I’m very cautious here in gold, as the market has become very choppy with a “stop hunt” mindset. Prices are very quick to reverse, and the “Johnny come lately” longs or shorts get squeezed unmercifully. What is literally there one second, is gone the next and a buck or two lower to boot. Hesitate, and you missed the train leaving the station.

“OK vegas, I get it; so why not just scalp these rises and drops for a buck or two all day long?”

We simply don’t know it’s going to continue for the whole day. Remember, this kind of action only represents 6% of trading action over the long term, and secondly, if we get in trouble on the wrong side of the market, our success rate can exceed 90% and we still lose money! All it takes is one of these “simple” scalps and you’re out $5 for you to gain religion.

Algorithm signals are great if you can get them without being $5 away from a decent price. Isn’t it amazing most of these spikes/drops occur right around a signal? The issue here becomes your stop level; where do you put it if you get in on a crazy spike/drop?

So, we slowly accumulate capital [via profits] and let the market sort itself out and get back to normal.

“Errrr vegas, when’s that?”

You will know it when you see it.

We made a little over a buck an oz today on the first price spike that expanded the range. At the first sign of price erosion I hit the liquidate button and took the profit. That’s all you can do in this kind of an environment; waiting for liquidation signals will lose you money.

Have a great day everyone.

-vegas