Aug 2nd 2019, Silver Chartbook

Great exits and other gems

We had quite some response after out last chart book release with requests of possibly sharing some true edges in the silver market. We can’t give you a complete lowdown with the limited format of a weekly chart-book, but we will share some of the secret sauce.

How can simple market relations be exploited? Good market play is a bit like a truffle hunt. In short a technician is devouring charts until his/her eyes give out. It doesn’t necessarily need to make sense where the truffle is found and how it grew there. The importance lies in a consistent pattern that has merit to be explored. Something that happens more often than not. As a matter of fact we find that too much intellectual aspect can become an obstacle. What do we mean by that? The brain naturally is seeking to limit uncertainty yet we simply look for great exits and other gems.

As humans we seek to eliminate risk!

This urge is not helpful for the process of principle based market participation. Since levelheadedness is a requirement for proper execution and confidence is a necessary element for prosper market play, the goal is to be light footed. You recall the last time you couldn’t even remember your own telephone number in a situation of stress? It happens to the best of us, or better said, all of us! A deeply rooted “fight or flight” response triggered, reduces cognitive functionality to rather allow the body’s resources to be available for physical action (react or retreat).

Pulling the trigger for an entry or exit of a trade is the equivalent of such a stressful situation. Entering into a world of uncertainty is simply overwhelming to the mind. An overwhelmed mind full of elaborate data about pros and cons for entering such a trade is not conducive to keep calm in such a situation. For exiting a trade this is especially stressful since one is already in a forced situation of feeling compelled to action. One either can stay in the trade, take partial profits or exit the trade completely.

We have already introduced our quad exit strategy which supports part of this human conflict by allowing partial initial profit taking that reduces stress levels. Without further ado, here is one edge that supports exit timing on daily time frame silver trading:

Daily chart Gold/Silver ratio 7/26/2019, simple 200 Moving average bounces:

Gold -Silver ratio, daily chart as of July 26th, 2019, Great exits and other gems

Gold -Silver ratio, daily chart as of July 26th, 2019

If you compare the following chart with the previous one all exits marked with a red arrow are identical to the green “reverse” labels of the chart above. In short, if you exited your daily silver positions on the day the silver/ gold ratio hit its 200 day simple moving average you fared pretty well to say the least.

Great exits and other gems, silver in US Dollar – July 26th 2019, daily chart, amazing exit timing:

Silver - US-Dollar, daily chart as of July 26th, 2019 - Great exits and other gems

Silver – US-Dollar, daily chart as of July 26th, 2019

The yellow lines are pre-assumed long positions from the last swing low. Now we could go into detail about how and what and… But as we mentioned above this isn’t helpful per se. We could provide more charts and more information; and again we think it is more useful for the reader to do his/ her research on their own.

The principle behind this is, that information owned by oneself provides confidence. With this also the opportunity to discover new relationships, new edges. In summary, becoming this truffle hunter and devouring historical charts, provides the opportunity of finding true gems. Those forward tested might end up creating one more tool to have a heads up on the market.

It is the sum of many edges like the one mentioned above that support entries as well, like the one we had on August 1st 2019:

Silver in US Dollar – August 1st 2019, daily chart, reloading silvers monthly position on small size:

Silver in US-Dollar, daily chart as of Aug 1st, 2019

Silver in US-Dollar, daily chart as of Aug 1st, 2019

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About the Author:

Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent.Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.

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