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 Replies: 5,643 / Views: 460,334 |
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Pillar of the Community
 United States
3789 Posts |
Montana, the answer to your question (in regards to how to spot a change in the trend)I ALREADY discussed in the previous chart of SOYB. If you missed it, you need to go back and look at it.
When you look at that SOYB chart, you can see how ranges are broken, one after to another. Usually those break downs precede a change in trend UNLESS buying comes in. BTW, I am not just talking about SOYB but ALL ASSETS exhibit this same type pattern. doesn't matter if we are trading nose hairs or copper, prices go in the direction of the range they break and as that continues, whatever direction it is, the momentum accelerates.
We have YET to see that sort of price break down in gold or silver. We have see it occasionally break lower out of the range and bounce back into it for now.
Your question about the 125, to me is like, irrelevant. I have told you a million times I am a trend follower. I buy 52 highs. So to me, I dont care at all about the 125 level. If I was looking to buy GLD, I am going to sit on my butt UNTIL this makes a fresh 52 high. Otherwise, I do NOTHING.
Again, allow TIME, along with PRICE to form these ranges and follow whats happening. Time will allow one to see the direction of these ranges and how they break.
And this leads me to another point. If you are going to make a go of this Montana, you must STOP and THINK what kind of time frame you want to work in. Are you going to be a swing trader and play the ranges?
Are you going to be a dip buyer?
Are you going to be a true trend following trader?
To me, you are not talking like a trend following trader. IF you were, you would say to yourself, ok so where is the current high in the asset I am looking at? When has it happened?
So you must look within yourself, look at your emotional make up, which only YOU can know that, take a good clean honest look at yourself and decide WHAT you are comfortable with and what you want to TAKE out of the market.
You cannot be all things in the market, you must develop an edge and sharpen it in trading.
So a swing trader, if he was buying the lower end of the range in GLD, they put a stop somewhere below the 125. Some traders might only do 1-2 point stop, so if it doesn't get back to 125, they are OUT and gone.
If you were a dip buyer, and you bought the 125, you gotta assign some sort of stop. Whether it be a point stop or a percentage stop.
As I said before, no matter what you do in markets, you put money in, YOU MUST HAVE AN EXIT PLAN. Then, you allow time to work out things out, and it may mean seeing your position go underwater.
Another point I have repeated A MILLION times here is you cannot escape taking losses. You will be taking losses, period. Taking losses is OK, staying underwater is not.
If a new range develops and GLD breaks 125, then take the stop. Simple. No need to over think things. Allow price to do its thing and make a new range.
So again, you have to decide your time frame. After you decide the time frame, think about what you want to use as a stop, as an exit in case things dont work out and trust me, many times, things just dont pan out for whatever reason.
Edited by yup7676
08/14/2016 3:07 pm
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Pillar of the Community
United States
3789 Posts |
Montana, I wanted to clarify one thing you said which was "main question which was, if we are in an uptrend and I get something wrong, should I just forget the stop loss until it's evident the overall uptrend is over. "
Let me be clear- no matter what you decide to do, say you put 1,000 dollars in the market in some asset, you darn well put a stop on that 1,000 dollars, be it 1-2 point stop or a percentage stop. I want to fully clear and repeat myself, ALWAYS limit your risk. In fact, putting yourself into a mind set of limiting risk will help you win the markets and not allow you to get over confident.
Just dont say "oh we are in an uptrend, ill forget the stop". There is no point in tying up good money even in an uptrend if the uptrend goes into a time period where it consolidates and does nothing UNLESS you have sufficient cushion of gains to ride out that time period.
I'll you why dont do that. All too often, new traders and the general public goes into some asset that has been an uptrend and buys say one dip. The stock recovers and grinds higher. The trader or investor might be inclined to add to this position ASSUMING the trend will continue this way.
I am here to tell you that eventually all good trends, either stop and roll over (this is generally after they have been running for a very good length of time) OR go into a time period of consolidation where they dip deeply and then go into a time period where absolutely nothing happens at all.
All the time mean time, the investor or trader is sitting there. Then they start to get restless as the asset goes lower on them. Then they start to panic, get upset, frustrated and perhaps while their money is tied up, as it usually goes, other assets start to perform well and run up.
The trader or investor then gets so antsy and ends up being deeply behind in their position and sells out at a big loss, rushing into other areas and about the time they do that, the asset they were in recuperates and runs again.
I know it sounds like madness but I have seen it. It used too happen to me when I first started trading. The key is then again, to use a stop. Limit your losses in case you buy and the asset goes into a funk. No sense in locking up good capital.
At this point I probably have confused the heck out of everyone lol. But this does happen.
We will someday see gold and silver really nose dive in this up trend, its normal tho. If you have been buying properly you really dont have to sweat much. But if you been late to the party and not paying attention, you could find yourself in this situation.
So again, whatever you do, ALWAYS PUT A STOP on the money you put in, EVEN IN AN UPTREND. Never say "oh I dont need a stop" or "i'll just forget the stop". Please everyone reading this, always manage your risk, do that by putting some sort of exit plan, a stop, to get yourself out in case something unexpected happens. As they say "live to fight another day".
Edited by yup7676
08/14/2016 3:05 pm
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Pillar of the Community
United States
606 Posts |
Well, maybe I got demoted back to white belt.
However, please know everything you are saying is very clear and well presented.
No doubt I am going to have a difficult time differentiating between "my money" and "house money". In the Livermore book, it talks about a day at the races and someone that won every race, then bet all the winnings on the last race and lost. When asked, the person indicated it was a fine day, only down a couple of bucks.
If I buy Gold at $1,200 and then again later at $1,350, I see them regarding consideration for selling as exactly the same. Obviously, I should not. I get the concept, but it is still hard for me to do.
Thanks again, Yup for the quick response.
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Pillar of the Community
United States
3789 Posts |
@montanaCMR
well as Livermore said and many many traders since his age, you have to be very disciplined with markets.
There is a time to be in, a time to sell and time to do nothing at all.
It can get antsy, waiting for that confirmation. However, as any good trader knows, and I can tell you, the minute you break your discipline and what you know to be true, the minute you dont buy according to true rules, you will be humiliated and destroyed by the market.
However, I can tell you that when I follow price, even if I get stopped out say 6 times in a row, even if my mind is sent for a loop and I missed the trade because after I got stopped out the asset still took off and went higher without me, so long as I follow price, I can find another asset to make up for that frustration.
If you have have discipline, follow the rules, follow price, the market will HEAP rewards and profits upon you.
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Valued Member
United States
154 Posts |
@yup
I have been reading posts about stop losses and wasn't going to ask, as you already contribute A TON to this thread for FREE! But I after reading your insistence on stop losses I'm going to break down and ask. What would your trailing stop loss be on Pan America Silver, and Sibanye Gold if your time frame was 10+ years? Got burned by the last trailing stop loss on my SILJ ETF so I currently have NONE! After reading your posts and Jesse L. book, I figure it would be wise to have one. The typical 10%?
@anyone who keeps up with this thread. I currently hold 4000+ shares of Integra Gold. They are shooting for a buyout but will get the mine into production if no buy out comes. What is the best course of action if a buyout offer DOES come? Sell, or hold the stock?
Thank you all for your input.
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Pillar of the Community
United States
1205 Posts |
HOLD dude...that's going to be a real winner........ anyone googling new explorers, google Gold Standard Ventures....great SA article the other day...gonna load up when time is right...author has been tracking explorers for 10+ years, and knows his stuff...moved GSV to #1 buyout opp, due to the richest ore deposits found there for any new mine in 3+ years. ========= http://seekingalpha.com/article/399...junior-minerEdited by ilikeikes
08/15/2016 11:27 am
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Pillar of the Community
United States
1205 Posts |
Amarillo is UP almost 17% today...another one of my favorite holdings.AGCBF
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Pillar of the Community
United States
3789 Posts |
@zach
First of all, in markets, no one can predict with a certainty what happens tomorrow so to try and predict 10 years out is really really really silly.
There is no such thing as a 10 year trailing stop nor does anyone put a trailing stop with that kind of time frame.
You do not approach trailing stops like that. You have no idea if after say another year here, PAAS and every single silver miner starts hitting 52 lows. You cannot look into the future, in your case you are getting way ahead of yourself and counting on PAAS having a profitable 10 year run. What if PAAS got caught, not saying they are, but lets suppose there was some corruption scandal? Then what? And here you are thinking about a trailing stop 10 years in, so you are assuming right now that PAAS is going to be this profitable company and everything will be fine and dandy.. whew thats pretty gutsy thinking and could cost you dearly in the future.
Again, if you are a trend following trader or investor, your TRAILING STOP should be based on how is the trend coming along and market conditions. If you been buying something in an uptrend, so long as the uptrend is in place and market conditions favor being a buyer, you stay. As the trend starts to show signs of being tired, or that market conditions do not favor being a buyer, then you should start to get that trailing stop together and tighten things up.
Never ever get comfortable and start thinking that far into the future.
Rather, just be patient, follow the trend and observe market conditions.
One final thought- were you aware that many times, an asset that was at yearly highs can correct often and the draw downs over years can be 20-40% or more and be very deep in nature? Will you able to stomach such moves? I doubt it.
That is why we again, follow the trend, pay attention to how it acts and keep an eye on overall market conditions. We do not want to get ahead of ourselves and assume our stock will be profitable for years and years to come. That is a sure way to lose money in the market.
What you should be doing now is at least a 10% stop on your position on PAAS since you are in essence starting from scratch again, if you think thats too much a stop then you can always lower the stop.
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Pillar of the Community
United States
1205 Posts |
Anyone interested in nomenclature...THIS article blew me away, explaining the Negative Interest Rate situation...I had no idea what this REALLY meant...until now....usually bullion does best during periods of heavy inflation, how will it do during "Stagnation"? http://seekingalpha.com/article/399...-rates?ifp=0 |
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Pillar of the Community
United States
3546 Posts |
Quote:
...how will it do during "Stagnation" When interest rates consistently remain at rock bottom, I cannot envision gold hitting the highs that we've experienced during the last five or so years. Over the long haul I look for its purchases to still occur primarily as a protective shield against globally negative occurrences. Obviously, gradual increases in interests rates will push PMs proportionally higher but one should not expect astronomical growth (w/ higher PM prices) until a majority of the economies of developed world collectively decide to significantly stimulate growth via progressive tax cutting stimuli. And we're just not there yet. |
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Pillar of the Community
United States
1804 Posts |
Quote:
So it's stagflation "lite" today, but serious stagflation to come if we continue to slide into more and more government solutions to problems. Higher interest rates will be the inevitable result. I for one could use a dose of 6% saving rates  |
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Pillar of the Community
United States
1205 Posts |
The buck stops here   |
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Valued Member
United States
154 Posts |
@yup. Educational as always. Thank you. Had never thought of a scenario like that. Will get that stop loss put in place and continue watching it.
@ Ike. Thanks for the advice on Integra. Looks like GSV a good one to have as well. No extra $ right now, but that would definetly be a place to park some IMHO.
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Pillar of the Community
United States
3789 Posts |
Been talking a ton about trading and almost nothing about the metals so just briefly-
Gold and silver remain in uptrends, no doubt about that.
However, they have been locked in a range for months now, as far back as June. We have seen some yearly highs been hit during this slow boring months and with no surprise, the break outs each time fizzled out and gold and silver fell back into their ranges. I suspect this continues until all market participants come back after summer ends.
Silver remains locked in its range of 21.23 on the very high end of the range and the low range of 19.60s.
Remember, whatever direction the range breaks going forward will give us a good idea of the next move of importance in gold and silver. Perhaps it does break the range lower or breaks it higher to hit yearly highs.
Time will tell. These ranges are like a rubber band that gets stretched. In time, the rubber band snaps and so will the range. Dont be surprised if the range gets snapped lower either, despite the fact we are in an uptrend.
Dont get confident or cocky that we will just continue to climb higher or assume that the range will be broken. When you assume and try to predict, getting ahead of what the market wants to do, is when you get punished. Dont let your personal opinion of what should happen take importance over the PRICE ACTION.
All trends at some point or another will exhibit counter trend moves within the overall longer term trend.
So watch the price action, be careful and dont get ahead of yourself.
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Pillar of the Community
United States
3789 Posts |
just a causal observation-
silver, riding the lower end of the range,, either it keeps probing this lower end and breaks it lower or starts to bounce away soon...
gold, could easily gravitate to the lower end from where its at now unless it too starts soon to bounce higher from here.
waiting and watching...
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Replies: 5,643 / Views: 460,334 |
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Posted 08/14/2016 2:59 pm
