Daytrade on Gold for a handsome profit!
I was finding that I was missing out on Monday’s movements if I had only looked at the markets from Monday morning. Sunday evening isn’t a good time to base trading signals on due to low volatility. Anyway, today, I got up earlier than usual and looked at the markets before the European open.
I decided to take a short on Gold as it was in a downtrend and the recent pullback up looked as though it had run out of steam. You can see that there is a resistance level where the market had tried to get above and had failed. On the support side, the obvious support is 1600 and then 1590.
I thought it was a good risk to take and I was betting on a move to break support at 1600 which it did. It fell quite hard after this but I was wary of the support level at 1590. I got out at 1595 for 13 points. The market did fall to 1590 or so but as I look at it now, this was a decent support level as the market has bounced up from here… I’m glad I got out.
I used to get really annoyed if I didn’t maximise a trade but in reality this is impossible. One never knows when the market will bounce and obvious levels of support/resistance are merely areas rather than exact levels.. you can never be sure! Once you’re out of a trade, if you remember that there are now probably better trades with a better probability of being successful.. that should help you forget the previous trade. To those who read the newsletter, last night I mentioned that as a small trader (compared with bit institutions and hedgefunds, it’s important to be nimble). Being nimble means that you’re able to move onto a new trade when you’ve closed it (either for a profit or loss), the worse thing to do would be to sit and play through the what-if scenarios after the event in your head… you just have to accept what has happened has happened and move on. This is a mindset and a trading psychology behaviour that you need to hone.
@makemoneyalan good article. good chart and sound advise.