Or, You Can Trade Gold
I stayed out of gold today for 2 big reasons: 1) the distance needed to place a stop was too great, even if you lowered your volume, and 2) the waterfall effect.
I addressed the first in my other post. The “waterfall effect” is when markets are moving down so fast a chart looks like Niagra Falls. If you sell it, the snap back can, and often is, very vicious and will most certainly stop you out or make you sweat steel. If you buy it, you risk trying to catch “falling knives” from an airplane. Sure, every once in a while you get it right and make a few bucks; the flip side is that when the knife gets within a few feet of you it’s too late to do anything about it if it is going into your head.
I don’t particularly like sitting on my hands all day, but I really hate losing money.
I was surprised crude oil didn’t go down more as gold bottomed. I was ready to buy into the gap below 104.00, but we never got there.
Since I started to trade crude 7 business days ago, the amount of time on the upside is about 2 hours; the rest going down, sometimes violently. Outside of the day when the Saudi oil pipeline blew up and crude skyrocketed 200 ticks in a couple of minutes, it has been a very tough long trade.
As gold finds support somewhere around its current price, I expect to get a very nice up day in crude; I plan on being there for it.
Have a good day everyone.
-vegas
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