The frustrations or trading gold and silver
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
Many times, over the years, we have written about the frustrations of trading; we are experiencing the worst of it now. A couple of days ago, gold and silver looked ready to break out to the upside. The probabilities were that gold was going to run to new highs; today, the metals were threatening to break down again.
Suddenly, the excitement and exuberance of gold and silver has turned into fear and a possible reversal. Today becomes a huge day for traders and meaningless for investors. Traders have been getting chopped up with these sudden change markets, including the false breakouts.
This type of price action is the reason why investors should never watch the day-to-day trade; they are not selling. Investors ask yourself, is it worth the grief and aggravation of watching gold and silver hour-to-hour and day-to-day. If you are investing, you are doing so with the idea of holding for an extended period; what happens today is meaningless.
Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions.
In all markets, price action determines what will happen in the next day, week, or month. Keep the two strategies separate. The worst trade anyone can make is turning a trade into an investment hoping for a way out. Traders must learn to take their losses and move on to the next trade.
Patience, discipline, and money management always win the day. Let the map of the markets show you the way.
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