June 15th 2019, Silver Chartbook

A trade underway

While in a trade it is important to remove yourself emotionally and review its standing. One has infinite choices before entry to make up ones mind and to stack edges upon edges for considering market participation. Once a trade is underway and money has been committed to the market, there are only four choices left.

  • Do nothing and simply let the trade evolve.
  • Get out, for whatever reason.
  • Take partial profits, or
  • add more and build a larger position.

This limited field of options with your capital at risk, makes you vulnerable to emotional bias. Anticipatory planing for an entry has now shifted to reactionary trade management for an exit(s). Reviewing your trade from time to time especially the longer time frame ones, with a clear head, is very beneficial of course.

Monthly chart of silver 6/14/2019, aggressive entries represent smaller stops:

Silver in US-Dollar, monthly chart as of June 14th, 2019 a

Silver in US-Dollar, monthly chart as of June 14th, 2019 a

With entries of at US$14.776 on the 15th of May and at $14.372 on the 30th of May, we averaged into our long term position at a competitive entry level. Buying into the prior 4 month price decline this aggressively allowed for a relative small stop in relationship to the reward potential. The wide double bottom spanning over a 2 year period provides additional support. Anticipating a price rise, this chart shows a distribution zone near the US$16 level where partial profit taking could increase your odds of success.

Silver, monthly chart as of June 14th 2019, large time frame support:

Silver in US-Dollar, monthly chart as of June 14th, 2019 b

Silver in US-Dollar, monthly chart as of June 14th, 2019 b

It was the trend line support on this high time frame in addition to this double bottom support that allowed next to other edges for such aggressive participation. There is no knowing if a trade will work out but if odds are in your favor, a call to action is efficient. Only time will tell if this particular trade is a winner within ones sample size of trades.

June 14th 2019, Silver/US Dollar, weekly chart, “we have a lift off”:

Silver in US-Dollar, weekly chart as of June 14th, 2019 a

Silver in US-Dollar, weekly chart as of June 14th, 2019 a

This weekly chart shows clearly, that prices have left the entry zone. Ideally, we want to see no price declines below the upper yellow line. One reward of such aggressive entries, as we have used on this trade, is a chance of a possible price bounce (action-reaction principle). An additional edge of risk reduction. In this case it worked out.

Weekly chart June 14th 2019, Silver/US Dollar, math on our side:

Silver in US-Dollar, weekly chart as of June 14th, 2019 b

Silver in US-Dollar, weekly chart as of June 14th, 2019 b

The green band marking the entry zone bandwidth of price shows to be over two standard deviations apart from the mean (yellow dotted line). Another edge that helped support confidence for entry. Digressions from the mean have a probability to return to the mean. Prices should slow down once at the yellow dotted line and ideally from there we move in a “creepy fashion” after a retracement to higher price levels.

Gold chart (daily time frame) of June 14th 2019, sector support:

Gold in US-Dollar, daily chart as of June 14th, 2019

Gold in US-Dollar, daily chart as of June 14th, 2019

Focus on the details

When a trade is underway one should aim to look for all the small signs of strength or weakness. Getting a feel of how healthy a trade is, is what supports good mentality and prosper trade management. Most traders make a plan previous to entry and follow it strictly. For novices a very wise decision, to not have ones emotions get the better of oneself. Later in the game it is this trade management with detail focus that improves profitability.

In our case, gold gave away the sector health with its entry zone behavior. The chart above shows that the strong resistance at US$1,300 was easily overcome. A steep move and good percentage return in a short period of time shows overall strength. The newly formed cup and handle bullish formation, providing for a larger time frame entry signal, fosters fresh money possibly joining in.

At a time where we as aggressive players are out of our entry zone, larger players might be stepping forward and possibly causing a struggle zone. This is an ideal positioning scenario. Now simply sit and wait and keep risk exposure to a minimum.

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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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