Wednesday, September 7, 2011

Gold - the one that got away

Yesterday, at 9 PM, on the hourly chart, Gold was making a bearish head and shoulder with a target that should have given almost 650 points - a lot. The neckline was at 28100. I took the short trade, Gold went down by about 150 points, then rallied, and this panicked me. As it is, I have a long term view that is bullish, so my short positions had low conviciton, I suppose. I exited at my enrty point, the trade was a break-even.

Today, I find the decline continued, hit the target of 27450. Last week, I had taken a similar downside trade - I had posted the chart in real time. Yesterday, I just could not bear the short trade. I wonder why this weakness? All of this is psychology, I suppose. Readers opinions are welcome. Chart when the trade was taken, then chart as of today.


pucchhu said...

dear sir
isn't it good to stand by your rules.

i have faced many instances,when i was stopped out, but ultimately trade went in the original direction, sometime later on the same day

tradeanalytic said...

Dear Sir , It is for the very first time i posting a comment on this blog ...i have small experience of 11 yrs in trading and advisory ... i did 5 years of job and since last 6 years i am a full time trader ...i tried every thing in T.A. from patterns / indicators / Gann theory etc. and i found it is not the most learned or most intelligent people making money as " Traders " it is those who have decide Following things 1. What Instrument to trade e.g. i trade Nifty + Commodities , then which way to trade ...intraday /Momentum/ Postional trades
2.Have there rules and setup defined ..with proper entry exit and sl
3. Money management
4. Position sizing
5. Discpline to follow your rules not matter what the result of previous trade ( Most Imp )

i have seen most of us, at times it is me also who ignored there own rules and result in losses.

i started my life as dealer and when i left job i was head of advisory in NBFC ....during my job days ...i started observing those client's trades who are making good profit, only 1% clients i found making "consistent profit " and rest making losses after losses ...reason i found as follows

1. NO idea what to trade , when to trade..... a intra day call will become delievry if stoploss hit ...and they say proudly to me humne to aaj taak loss book nahi kiya .

2.Taking more leverage than they can handel, in result getting margin calls.

3.Not eager to learn ....not accepting mistake and saying ke yaha to saab operator ke hath mai hai ....not taking responsilbilty of there trades .

4. leaving there account to dealer's or relationship manager and expecting them to make money for you ...instead they made brokerage from your account .

of late i just want to share that even with basic setups we as an traders can make money ...........but only thing that weneed to do is keep learning from our mistakes .

Thanks & Regards