Wednesday, January 25, 2012

Fading gold was not a good idea on a FOMC day

Today, I had the "brilliant" idea of fading gold when it reached the +1.5% appreciation for the day (which is an above average appreciation on a daily chart). But it was without counting on the fact that (for once) the Fed rate decision was going to move the market a lot. Yet, lately, the FOMC's meetings had failed to produce any type of reaction from the markets. But today, for some reasons, gold as well as crude oil roared without looking back in the rear view mirror... and I was left holding the bag with my short gold trade so to speak. Fortunately, my other trades on natgas and crude helped cushion the blow. One thing I learned today is that you cannot trade gold from the technicals at this time and this until things calm down on the mega-debt-of-the-developed-economies front. We learn every day, don't we? Result for today -$591 trading 2 contracts (commissions deducted). Details below.


  1. No stops? Doesn't seem right.

    1. Yes, I had a stop but it was large. With gold you can't use a tight stop otherwise might as well not trade it IMO.

  2. Its ok.Imagine if you were right on the trade? When everyone is bullish,its time to be bearish and vice versa.Everyone was so bearish on Gold in December and see the move from 1500 to 1710 now.I think you made the right decision. Don't be too hard on yourself.

  3. neither was going long on oil at 100.78 :)

  4. So I guess you quit posting??

  5. Where did you go????

  6. He's having emotional issues. He started thinking about the money too much when he went from 1 to 2 contracts per position. He started cutting off his winners and letting the losers get larger.

    For example, if you're scalping Crude (CL), 38 ticks is way too large of a loss. You don't need more than 10-20 ticks for CL scalping with 20-80 tick targets.

    Dude, I gave you good advice. Drop back down to 1 contract to get your mojo back with the exception of the CL where you start with 1 and you can add in 1 contract increments during a strong trend.


  7. Where are you??????