Apr 7th 2019, Silver Chartbook

When in doubt, stay out !

The advice given in our last chartbook publication was spot on. Not trading Silver last week saved you money for sure. “When in doubt, stay out” is one of the very few intuitive responses one should follow in the otherwise counter intuitive market.

Gold, being a related market, and trading a tad cleaner, allowed for a low risk entry on April 2nd (follow our free Telegram channel with real time signals!).

Conservative Gold trade with tight stop:

Gold in US Dollar, 60 min chart as of April 2nd 2019

Gold in US Dollar, 60 min chart as of April 2nd 2019

By the next day the  first and second target were hit:

Gold in US Dollar, 60 min chart as of April 3rd 2019

Gold in US Dollar, 60 min chart as of April 3rd 2019

The final 25% position of Gold stopped out at break even levels.

Looking at the daily chart, Silver shows a so-called “Megaphone” formation. It is defined by expanding highs and lows on consecutive days. A trader’s nightmare, no matter if you trade this from the long side or the short side. Stops get taken out immediately and do so on second try efforts as well. This is the costliest environment to a market participant, and highly taxing to psychology. Six sigma events are even more dangerous, to both your portfolio/wallet and psychology, but they are rare. Fast chop, which is another form of extreme struggle between conflicting investor beliefs whether prices go up or down, is also rarely to be seen.

This makes the relatively common Megaphone formation the one, to truly look out for and avoid.

Megaphone formation, “when in doubt, stay out!”

Silver in US Dollar, daily chart as of April 6th 2019

Silver in US Dollar, daily chart as of April 6th 2019

All this makes no position, one of the most valuable ones. Patience pays. As does sitting on one’s hands. Keep your powder dry and wait for true low risk opportunities!

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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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