TRADING SENSE

                                        Gold Trading Today

I don’t like trading in a casino environment. If I wanted gambling I’d go to Las Vegas; I would definitely have more fun.

Today was one of those days when I was right and lost money. Why? Because gold has gotten to the point where accurately defining risk management is almost impossible. Forget $3 - $5 stops, you will get stopped out all day long with these; maybe forget $10 stops.

Gold [during the U.S. session] is moving so fast, and trades in such a chaotic fashion, that trading it is like playing craps. You are up $2 one second and down $2 three seconds later. It’s pretty much like this the entire U.S. session regardless the daily range. Meanwhile, the usual stop hunts are always a threat and dealer quotes are out in left field with slippage a huge, huge problem.

I’m going to position trade more of the currency pairs as we move forward. I can better accurately define risk in AUDUSD and EURUSD, and get better profitability than gold. Right now, gold is a total trading mess.

Usually, AUDUSD correlates pretty well with gold; not tick for tick, but the broad moves unless you have some specific news on the biz environment out of Australia. Today for example, I bought AUD and made a small profit, whereas if I was in gold I would have gotten stopped out when it dumped $6 from where it was when I bought AUD. I was able to hang in with the currency trade because the currency pair isn’t trading like gold is right now; a lunatic teenage girl.

My point is that risk in gold is getting completely out of control. I’m not risking $10 to make $0.50. I can handle and deal with tenths of a percent loss [which I had today]; and I know what happens to traders that risk 10% or more of capital on a trade [they are gone]; don’t get me wrong, the currency pairs can definitely hurt you if you don’t manage the risk properly, but they don’t go 30 – 50 pips in seconds all day long [up and down] like gold has been doing.

I’m still doing paperwork for our new PAMM. I’m expecting approval sometime early next week. If you haven’t done so yet, and you are in the PAMM, please email me with your PAMM investor account number and I will make sure you get my help file next week that will make the transition easier for you. There is information in the help file you will need when making the transition.

Have a good day everyone.

-vegas