Aug 10th 2019, Silver Chartbook

Measuring health

The following charts were all posted in real time in our telegram channel. We would like to take you through a progression in time in the precious metal sector. We will show how to evaluate, while within a trade, the quality of ones position. This for the reason to possibly readjust points for exits and stops. Measuring health allows for fine-tuning ones performance and maximizing profit.

With our quad exit strategy we are also measuring how healthy a move is and can then decide where and when to apply changes. As a beginner you preferably plan a trade ahead of time and do not change your plan once your money is exposed. The reason for this advise is that under stress we tend to follow intuition for solutions. In a counter intuitive environment intuitive decisions are the worst choice. Once nimble enough to not follow intuitive behavior one can progress in adopting to market behavior and measuring health.

What type of signs are we looking for?

Let us examine the last reload situation. We went long on Thursday, 1st of August 2019.

Daily chart Silver/US Dollar 8/1/2019, fading a retracement in the direction of the trend:

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

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

When others sell it might be time to step up and buy.

Monthly chart, silver in US Dollar – August 1st 2019, larger time frame confluence:

Silver in US-Dollar, monthly chart as of Aug 1st, 2019. Measuring health

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

One always needs to know if larger players are with the direction of your trend or not. This determines the likelihood of a follow through on ones trade .

Silver in US Dollar – August 1st 2019, weekly chart, mid term market participants are taking a pause:

Silver in US-Dollar, weekly chart as of Aug 1st, 2019. Measuring health

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

As much as the weekly chart is not necessarily supportive for our short term daily reload trade, it is also not quite against it either.

August 1st 2019, 60 minute chart, silver in US Dollar, immediate reaction of price:

Silver in US-Dollar, 60 minute chart as of Aug 1st, 2019. Measuring health

Silver in US-Dollar, 60 minute chart as of Aug 1st, 2019

One of our core philosophy principles within the quad exit strategy is immediate risk mitigation through profit taking. As such the action/reaction principle is imperative. Prices quickly advancing after our entry in our desired direction, is the first and may be most important sign for a healthy trade.

Measuring health, daily chart, silver in US Dollar – Financing target reached:

Silver in US-Dollar, daily chart as of Aug 1st, 2019 b. Measuring health

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

Once risk is of the table and one plays with the markets money, emotions change and one observes the market level headed. The next goal reached for truly being able to perceive the move is healthy.

Daily chart Silver/US Dollar 8/4/2019, no need to respond:

Silver in US-Dollar, daily chart as of Aug 4th, 2019. Measuring health

Silver in US-Dollar, daily chart as of Aug 4th, 2019

Since we financed into momentum and made ourselves feeling like a winner, there are no restricting fears anymore. This allows for sitting through a deep retracement the next trading day with ease. Prices progressing aggressively in the desired directions, the day after, is a sign of health and no early profit taking is required.

Gold in US Dollar – August 1st 2019, larger time frame confluence:

Gold in US-Dollar, daily chart as of Aug 4th, 2019

Gold in US-Dollar, daily chart as of Aug 4th, 2019

This is especially substantiated with gold breaking to new highs at the same time.

Measuring health, daily chart, gold in US Dollar, 8/5/2019 – Gold breaking its range and approaching the US$1,500 mark:

Gold in US-Dollar, daily chart as of Aug 5th, 2019

Gold in US-Dollar, daily chart as of Aug 5th, 2019

Looking for relative weakness/relative strength is a extremely helpful way to measure the health of ones instrument within a sector. Tides can change quickly.

Measuring health, daily chart, silver in US Dollar, 8/5/2019, gold stronger than silver:

Silver in US-Dollar, daily chart as of Aug 5th, 2019. Measuring health

Silver in US-Dollar, daily chart as of Aug 5th, 2019

While gold nicely held its range breakout and even advanced-silver bounced of the triple top distribution resistance zone.
At this point considering taking partial profits from a health barometer perspective is possible depending if it is a reload position or a core potion.

August 6th 2019, daily chart, silver in US Dollar, our money on the right horse:

Silver in US-Dollar, daily chart as of Aug 7th, 2019. Measuring health

Silver in US-Dollar, daily chart as of Aug 7th, 2019

Already the next day silver pushed strongly through its range. It is this kind of rotation that shows that big money is at play and that we are exposed to the right instrument within the sector: health rating AAA+++

Measuring health, daily chart, silver in US Dollar, 8/9/2019, confirmation:

Silver in US-Dollar, daily chart as of Aug 9th, 2019 #Silver #Gold #Metals #SLV #SIL #GLD #GDX #GDXJ

Silver in US-Dollar, daily chart as of Aug 9th, 2019

It is important to review ones trade in context after it is closed out. The chart above shows weakness after our exit (prices actually closed below US$17 for the week). With aggressive exits on reload positions we protect capital exposed over the weekend which represents risk.

This runner produced a return of 5.86% this in less than a weeks time. Money exposed through time equals risk. We have posted all those entries and exits in real time in our telegram channel! Making good profits in short periods of time is efficient as it frees up capital for new opportunities and represents a low risk approach.

Can silver run a lot further? We certainly hope so! We still have a monthly time frame exposure position.

The idea is not to pick tops and bottoms, the idea is instead of holding on for dear live which requires wide stops, to rather pick sensible target points. This allows for efficiency and in most cases with some practice, produces exits much more ideal than getting stopped out on trailing stops. By measuring the health of ones move throughout the trade one can fine tune such targets and reduce risks even further.

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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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