Updated: Jun 7, 2020
A number of you have asked about my recent short trade in gold and whether I am still short the metal.
The short answer is, yes. You can see where I added to my positions by viewing my trading statement in the image below. In summary, I have essentially doubled my trading account in less than a month. My current profit position stands at just a tad over $110,000.
You'll see from my trading statements that I added to my short positions over the last few days. Whilst the trade has worked out so far, in doing so, I will be the first to admit that I broke against convention of maintaining the discipline at all times to implement my "break-even rule" when trading. Now, I know that I have mentioned this a few times before, but that "break-even rule" is the single, most valuable piece of information you will get out of my Trading with the Time Factor books.
Not only will it save you thousands and thousands of dollars, it will make you a far more profitable trader if you exercise the discipline to stick to the rule.
Now, whilst my current profit position is a good one, I need to point out that it was a very leveraged position. If the result went the other way, it wouldn't have ended up in such a good outcome. Notwithstanding, I calculated that my risk on this trade was around 20% of my account, but the reward should be somewhere between 100-200%. Also, I am trading with funds that I am prepared to speculate with (ie that I am prepared to lose my money on).
This trade hat a bit going for it. There was some nice Square of 9 pricing suggesting a top near $1790 and we had our Dynamic Gann Angles indicating price resistance. We marry that up with our "trading to Time" technique, and the ingredients were there for a short trade. It was all outlined in my Gold Report well before the event.
For this trade to work, I reiterate the view that $1660 would be nice but the $1620 move is where I'd really like to see gold go. I've indicated some potential timing again in that Gold Report, but the forecast curve also shows some volatility ahead. Personally, I don't have the nerves of steel to hold on during the volatility, so I am going to use $100,000 as a nice round number to take some profit off the table so I can sleep better at night.
I'm looking at some trades now in the soft commodities markets - wheat and coffee in particular. For anyone out there who follows those markets, I'd be really keen to hear your thoughts. If I take the trades, I'll most likely write about them again on this website.
Until next time...