For the past few months, all markets have been trading on light volume, churning around the mean. This is an indication of a much bigger move on the horizon. Like the consolidation phase of markets, we are seeing this play out with volume and price. Something big is on the horizon.
While most markets are stuck in a malaise, including gold and silver, the trends have been playing out according to script. After peaking last week, gold and silver are headed lower once again, bringing 1800 gold and 21.00 silver in play.
With the jobs number this Friday, gold and silver could test or break through the recent lows. What you must remember, when trading the trend in paper metals, you must go with the trend. Many are too opinionated to allow trends to work for them.
One thing to always remember, markets are always right, but opinions seldom are. The mental makeup of most prevents them from letting the markets do their thing, preventing them from capitalizing on all conditions. If you are unwilling to trade both sides of a market, you are an investor. Successful trading is letting the markets work for you.
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.
On Saturday, June 4 at Noon EST, I will be doing a Q+A webinar on all products. If you would like to join, register below, it's free
