Don’t Get Too Cute
Fridays report is a preview of what I will be discussing in the weekend report. I want to explain why sometimes traders become victims of getting a little too cute. Let’s discuss this a little bit right now…
I have some newer readers here, so I wanted to express the importance of being invested at this time. I offered several trades yesterday and almost all of then started to move higher ( Some very nicely, up 10-15 %). Different traders do have different styles and some wrote to me and said, ” I grabbed your CDE trade at the open and sold it in the afternoon, so I locked in a cool 10%!” Is there anything wrong with that? No. That is scalping some gains, and that is a style that many like to employ to avoid giving the gains back. It can be very effective and profitable, and I have done that in the past too, just collecting 10% here and 10% there does add up nicely, however…
.
At times I do not like to get “too cute”, and that time is when we are coming out of a very oversold ICL. The weekend report is going to discuss this further, but for today let me just briefly say that-
-Yes, we will see pull backs along the way
-Yes, you can scalp trades and make money, and try to buy or re-enter on a pull back
-However, I want to show here that when Precious Metals are coming out of an ICL, you could miss out on the bigger gains by scalping. Some may wish to scalp partially and stay invested too with ‘buy & hold’. Let me explain.
GDX – GDX broke above the downtrend line, and you can see that by scalping gains a week ago, one might have missed this current follow through. I can picture this back testing the trend line in a dip to a dcl, but that doesn’t have to happen. Let me discuss this buy & hold approach further (at least a partial position).
Now let me show you something important about ‘getting too cute” by trying to scalp each 1 day jump higher.
CDE & AG – These were recommended ‘buys’ yesterday and jumped 13%. Scalping here locks in gains, and if that is your style, that is fine. I just want to point out that when these are coming out of an ICL, these can just run and run and run away.
Notice CDE CHART #1 coming out of an ICL last January onward. You could have scalped 5 – 10 % all the way up, but getting in at a lower price was not easy and in some cases, not even possible. Please read the chart, it was a bit of a runaway move.
CDE CHART #2 – Great trading scalping maybe 7-10 % here and there, right? But what really happens coming out of an ICL?
CDE was really up over 400% from The ICL – lows to highs, and 300%+ from the arrows of scalping. The ‘perfect’ scalper may have pocketed 40% on small trading positions? For the patient ones the gains were crazy good, and we saw CDE, AG, TRX, VGZ, MUX, etc, etc, double, triple, and quadruple. I encouraged selling a small portion after large surges higher and adding on the dips, while holding core position for this reason last January onward. That is my trading style.
Continuing on…
GDX last January coming out of an ICL. Day 5,6,7,8,9, & 10 were actually a LOW point. No pullback, it was sideways for a week and then this took off upside! Boom and anyone ‘getting too cute’ was left behind. Here at Chartfreak, I was warning traders not to get left behind. Look at this chart and ask yourself,
” If I sold on day 7 or 9 or even 10 of the daily cycle, where would I have re-entered?” Food for thought at a time like this.
SO I will discuss this further in the weekend report.
As I write, GOLD is down over $4 and it looks like we might get a pull back, but remember that in a Bull Market move, especially out of an ICL, ‘surprises are often to the upside”. YES , we absolutely could have multi day pull backs along the way. No, I am not guaranteeing that this move will go straight up again. Sure we could even see bigger pull backs than what we saw last year at this time, because Bull runs buck and kick to shake off new riders. My advice is simply this, as we come out of an ICL, keep some skin in the game and ‘don’t get too cute’.
We all have our own trading styles and I don’t think that Mine is right and yours is wrong or visa-versa, they can all be effective and profitable. I am not saying to everyone , “YOU SHOULD BE ALL IN AND THATS FINAL!” NO, I am saying that you want to at least have a position , some skin in the game, just in case we take off higher like last Jan – March 2016. I am just here now to show that there is the real risk of getting left behind and missing some great gains in the coming weeks if one goes to all cash at this stage of the run. The history of the above charts can be our guide. Thanks for being a chartfreak member.
Enjoy your Friday and have a great weekend!!
Being able to stay in winners while riding out inevitable pullbacks is one of the hardest things to learn in trading, it’s also the single most profitable and will change your life once you can do it consistently.
Great report, short and sweet.
The hardest thing is picking the winners.
“Timing” in the Sector you are investing in might be even more important…….Then deciding what investment vehicle to use to profit from in that Sector,s move…….
To put it in clear E.W. terms, I like to ride up the hind quarter, and then jump on the shoulders before the giraffe head appears.
Huh?
I know that New readers may not understand that at all, but I’m sure you do 🙂
I don’t get the hind quarter part…. but I sure like the shoulder jump BEFORE the giraffe neck starts. Don’t you get at least partially off before the head appears?
When I see the Ears : ) – Thats the double top on a 15 minute chart
AWESOME answer…and Maria’s giraffe illustration is great! Thanks both,
https://uploads.disquscdn.com/images/2de6718e1d87567bcd039730c13498dae4d7bec019c2e94ca9729fc4331d196b.jpg
That’s correct MAWEEYAH : )
i APPRECIATE this reminder…. I KNOW i have said many times … “just remind me next time to ride the waves” :o) i did well in energy but I know I would have done better in miners just holding……
Don’t be so sure, Marie. It is hard to put a price tag on gut lining.
sorry i dont understand what u mean… by gut lining…giggle…
but for instance, i did measure the profit % differences .. in say DNR – which ran 436% in first run…. trading the ‘waves’ I only managed to scrape like 280ish% …. (really bad I know) ;o) #MariasTravelFund
but then again… i do work full time …soooo i have to give myself good 100% cushion excuse …lol
Watching that cascading fall in the last quarter produced in me, and I’m not sure in anyone else, a certain anxiety level which may cause ones stomach to churn. Thus the term “loss of gut lining”.
ahh.. ok. tx …
well… not just you.. that is how EW theory was born …. psychology of human (crowd) behavior is pretty amazing… which incidentaly was/is my main draw to study this field…
I just came across a analysis form you may or may not be familiar with. It, too, is based on human nature and Incorporates TA in some form but is very unique. Given your expertise with EW I would be curious to here what you think. It is extremely interesting. First the theory:
http://stockcharts.com/articles/wyckoff/2015/07/wyckoff-power-charting-lets-review.html
Then the application:
http://stockcharts.com/articles/wyckoff/2017/01/going-for-the-gold.html
thanks EB.
.. I will check out those links when I have time… just a warning.. it may not be until im actually on vaca…lol – time is super tight right now. But i just wanted to say… I am nowhere near an expert in EW .. a novice at best!!! ;o) https://uploads.disquscdn.com/images/ec4bfd12ec149cdf19ceb2f00eae545f848a1803b78696d92aba8fd9d7eedee0.jpg
Tx
M
https://uploads.disquscdn.com/images/d9852a3d58849d885d07e2c6b30a505b6f736891f6ac8a8b2295162000268e5b.png
🙂
I am sure You will be mentoring the New Readers going forward in this regards.
BTW: You are very good at it……..
lol … yeah.. i often imagine racing him bareback wide open in a field… i think he would have been a good match.up… I of course .. would have WON… but .. i imagine him being an ok competitor….
*riding a horse bareback for any of u dirty minded folks …. ;o)
**ACTUALLY …. on second thought, I think it would be more like this below … me waiting for CF to get his but up on the horse….
https://uploads.disquscdn.com/images/4346bbebe15fde4529409ed7e44ebb6c9503e8c63812315b21103774294c35a1.jpg
Good advice and I think Alex is excellent at pointing trends and timing out.
what? dont u read CF blood sweat and tears reports?
#HB
*u can borrow my reading glasses…. or Ken’s .. his are higher power than mine…. *Giggle
In a bull market it certainly can be. I, however, still trade like Livermores pre and post epiphany in that area 🙂
That’s all you can do Alex. Some are afraid to get another beat down.
Fear and Greed rob the profits
I left it up to the reader to keep “Skin in the game” , showed reasons why I find it reasonable , and left it to them to decide how much skin in the game. “That;s all I can do”
Fearing a beat down, I imagine they ( You ) would be more cautious, maybe avoid leverage, be aware of proper position size based on risk tolerance, etc.
Me? I embrace leverage! 26% Yesterday. 1-Play the leverage with stops. 2-Play only on the first 1/2 of the cycle! 3-Understand you will have losses at times.
LOL – I know, that leverage really heaps on the gains in a good run.
No big reaction to payrolls yet. Wouldn’t be suprised to set metals settle down a bit, healthy as long as they don’t get hammered. Let’s see how everything looks by the open in 1 hour.
I answered your question from yesterday back on that thread.
URRE News:
https://globenewswire.com/news-release/2017/01/05/903908/0/en/Uranium-Resources-Closes-Sale-of-Assets.html
Thanks for the Friday report. I will just add a comment and that is the cost of trades if you scalp a lot. You get charged buying and selling and that eats into your profits, and there is the tax rate on short term trades too which you get hit with later. I only started trading again a year ago because Merrill offered me free trades and a good platform if I put a chunk of money with them. Now I do have the freedom of moving in/out without that constraint…but I was surprised at how it ate up profits when all costs were added up when I did not have free trades.
Did that offer from Merrill have an expiration? Thats a nice offer.
They still have it going for me! I think it was Cason who joined Merrill to get it too. It really has given me freedom and is why I started trading again last February… and why I signed up with you to help! I had been following you for years where you posted online.
Stalker, aye? lol Just kidding.
Glad you made the switch, it sounds like you and Bill got a good deal.
Yep it was Bill not Cason.
I moved from TD to Merrill a few months ago. Free trades with my account and they paid me cash to move. One of my accounts is a margin account, so I can trade daily if I want. The other isn’t so, I have to wait for the 3 day settlement.
Sounds good. I have TD too. Maybe I can get something from them if I threaten to leave.
I did complain they were not competitive. They gave me like 20 free trades. Not enough, I get unlimited free trades now. One downside to Merrill is they won’t let me trade some ETF’s, ie the now defunct UWTI, UGAZ, etc. Leveraged mostly. But, BOIL, JNUG, NUGT are okay
You are a daring man Bill! Margin scares me! I have the 3 day acct. and got so active once I joined Alex that I got slapped with a “free ride violation” early on…I did not even know what that was! I learned my lesson.
Well to be clear, I don’t trade options at all. I have the account authorized for it so I don’t have to wait for the 3 day trade to clear. The only stipulation is the trades have to be in stocks over $10. Not sure why, but I can day trade if I want.
I got clearance for options, but they are not free trades…plus, I got KILLED with them when I last traded. Not for amateurs…I learned that the hard way.
It was bill. I pay etrade a crap ton in trades, maybe I need to look around around as well!!
I trade with Scotttrade who will be TD in several months. They pay me interest on my cash which covers my trades – I have had the same manager for 20 years, she is wonderful. Once it moves to TD, I will look into Merrill and see where I can get the best deal. Thanks, Nancy.
Like Bill, they paid me some cash perks to move $ as well as the free trades.
I’ll have to check them out…..I use TD and spend lots in trades…..
When I traded years ago, I was with OptionsXpress and those charges really hurt, and they had the best prices back then! I still have an account with them, but I use it mostly because I like their charts best. I don’t trade much there.
Can i ask why you’d move to merryl, i have both, scottrade and TD? Just curious, is it just they offer interest on cash? Thanks
Money is a consideration of course. But maybe I can negotiate a better deal. Also, diversification among brokers is a consideration. I have a little money in Schwab doing nothing. But, bottom line, I don’t want to confuse myself by trading two different accts during the day.
To get another view of what Alex is alluding to in this report, slap a WEEKY Heiken-Ashi chart on our favorite golds/silvers/etc. Then scroll through the charts starting Dec 2015. My TC2000 shows beautiful charts green bars up (I make them thicker by switching to line first and making the line chart thicker then back to H-A) and red bars down. Enjoy.
Do show…..
I had this for the weekend report. Same idea.
.
refresh
https://uploads.disquscdn.com/images/90b751382f26143cb2b25f1ce9d77db424e35a9394482372a2da17ff17321b2d.jpg
Do you have an opinion on Heiken-Ashi CF ?
Not really, I hardly ever use them. Really long candles can show strength in that direction, but they are used to try to filter out some of the ‘noise’ .
I use some of that ‘noise’ to see what the stock did in its entirety. So I dont use them often enough to have an opinion on them.
Thank you.
I have never studied them……
IMHO they don’t need a lot of study. If you have a successful system, skip H-A. But for folks who don’t, I recommend they go through 100 or so charts in different time frames to see if they can help them with entries and, especially, exits. WATCH THE COLORS CHANGE. I can see now where I should have been exiting many of my stocks several months ago especially using monthly charts. Several herein were also stuck in the mud with some stocks. H-A adds discipline. Of course, they have also led me back in.
By the way, H-A can help one exit giraffes. Drop down to hourly or lower when the ears are showing, but stay with green candles as long as you can. 🙂
Lol
Thanks Glmus.
I explained how I use them above. I got some great support from TC to make my life easier.
My guess is that professional traders don’t like H-A. But look at many charts watching bars change colors in various time frames. Let your eyes (and brain) decide.
nicely put
I figured that ‘they’ would take some profits and try to shake us out in the first hour. I was all red to begin, now I have a few greens. I watch the first hour a lot. When we were getting hammered, they would run golds up in the first hour only to hammer us the rest of the day. Now that we have an uptrend, I suspect the opposite will be true. Hammer in the first hour, then join the fun. So far, the hammer is very light.
Looking a lot better now. Thought they would do a little more shaking as well. Maybe we’ll go straight to the 200DMA and pause for a bit there.
I just got a bit of a drop – down 1.2%. Still the first hour.
Well, here is our extra shaking!
I think “they” are manipulating till they have the positions they want. I am very mistrustful of our markets.
So, I expected the exact inverse today. Open lower, rise up to test it – that becomes the HOD – and sell off. So that 1000 AM was a long entry yesterday so is a short entry today.
I scalped JDST. I WAS gonna post in real time. Set a limit sell, as a day trade only. I’m married to the long side, but a buck is a buck so I can make 1 going down as well will do it. In true rookie fashion I set limit too low, went to an appt and came out it had already been hit. A winner, but now I need a bit more downside protection than I thought!!
A good example of CF’s thesis in todays report:
I “thought” Uranium (URA) was at the top of it”s wave and stated I Sold a % of my position Then this morning URA gaps up another +2% But I am still reaping profits maybe not as much but still profiting ya know ?
I added some GSV and FCX to my acct on hourly buys hoping to buy on the first hour pullback. Sadly, the pullback is still going on with four minutes to go. Maybe I will be sorry.
Sadly, we are an hour and a half in and no turn around in sight for me – down 1.9%. I am still awaiting (hoping for) some hourly buy signals, but not yet.
Sadly, the turn up is not showing up. I am not thinking of selling yet, but down 2.4%. Not what I expected.
Looks like backtest of breakout today. Higher next week.
Picked up a little more JNUG just now not much
Thanks, Carl
https://uploads.disquscdn.com/images/9a7bcc3118bbaeb79801900ece587e7b6c7de4e0de9eac86847887e3be26735b.png
Nice chart!
So for those of us not already in CDE, here on your entry. I just grabbed my first half. Adding to SAND, AG as well.
Sold JNUG trading position at 8.94 yesterday. Will add back this afternoon, likely at $1.50+ lower than my sell point. Selling in miners a little rougher than I expected considering gold only down a get bucks, really.
Alex, do you still follow Tinka? Weekly chart looks good? I wonder what the recent volume spike means? TKRFF.
Here’s weekly chart going 3 years back. Cup and handle forming? https://uploads.disquscdn.com/images/cc868db8797f5d4ec8c3f67314c1b47fb1089e708ea8e2d9918fbeb1842f61c3.jpg
Nice chart – I dont like some of the light daily volume, so I dont follow it. Good looking chart though here.
JNUG, in, $7.28
gap closed as we speak however nugt has still 2% to go to close it’s gap
i m buying as well : )
GAP IN NUGT IS NOW ALSO CLOSED 8.8
Thanks, Ray. Man was I a bit early in that one!! Thank goodness that last minute charge saved me!
I really hope we get some buying into the close. I’d hate for it to close here : (
Gold doesn’t seem to be cooperating. I have been hoping to have some hourly buys to pop up to tell me the worst is over. I got a 30 min buy on ABX about 15 min ago. I bought some and am down 5 cents. 🙁
Agree Alex – I trade more like you. We do not know when the next shoe drops on the banking system in any country or the yen has flown up or some “war/violence” and we wake up and the miners are way up. In this black box marketplace it may be a good strategy for those who are not as ready to just get in to go in smaller fractions (1/10 at a time instead of 1/2 or 1/3) to ease their way in. The mature more experienced traders have stronger stomachs to not get kicked off the bull.
You make a good point, Seer. I think the likelihood of having bad news greeting us on a Monday mornings outweighs the risk of carrying positions through the weekend. Of course the implication is the “news” more likely will be bad and the “flight to safety” will involve gold. We don’t know which button the MSM will push at any certain time to remind us of how precarious our economic situation is, as if it just appeared.
*u best buy some puts …
**did i mention I’d be wearing my catsuit? https://uploads.disquscdn.com/images/fd0f159098baedb260665ed40a57b8f34395d760839119617d2c24e76fbb4e5b.jpg
Not CF….He will be wearing just a loin skin since it is a bare back horse race….. 😉
hey… what happened to your loin cloth comment? HA HA HA
Had to leave computer for a bit…..wow, all mine down even more than when I left. Argh.
Id like to just walk away for a month, but that’s damn near impossible
walk away? hmmm.. all these years i thought it was ‘walk this way”
LoL .. i really hope you didnt see my post to Steve ‘not-Aerosmith’ Tytler.
that would win Synchronicity of the Week
Ha! no i did not… very funny!! :o)
sweet! 🙂
okkkaaayyy then.. what am i thinking of right this minute??
OH MY…. U DIRTY OLD MAN!!! ha ha ha
All I’m thinking about is wine&hot tub…. ;o)
TGIF!!
https://uploads.disquscdn.com/images/184985857c2dbabbf8bf525328b0b0024c0e1d5c1e54235b3c9a14d68b902e1f.png
correct.
even more ‘win’ for Maria
Wait, SOG you were thinking about you relaxing or you were also thinking about Maria in the hot tub…?
i was thinking about what M thought i was thinking about.. but it didnt involve thinking bout M until she mentioned the hot tub,.. and then i started thinking bout her wood grain pictures.
That’s right, I was thinking about the wood pictures, too!
Hahahahaha
Hahahaha
sooooo .. think we’re gonna get another 5 gorgeous waves back up???
how beautiful is that chart… dang…
#ChartFreakEtte
https://www.tradingview.com/x/2BRLIxJO/
Nice Maria. GDX gap getting filled now too. Let’s see how we close.
Nice chart
Think I can hold JNUG until GDXJ hits 160? HA! Yeah, I don’t either.
Be careful with those 3xers case.. PLEEEASE…..I thought you got off that emotional roller coaster this past NOV ish… Best to go easy. Stay humble lest daddy gets angry and spanks* u again with another don’t get emotional report. 😡
*a line id happily stand in line for.. *giggle smirk
#HFT
Jobs report was bad this morning. Things go the opposite direction since last summer.
Yeah, the market reaction today was a bit puzzling, imo
A right shoulder is being built in gold. It needs time to run for awhile (zig zag).
I’m not usually a day trader, but I bot 5000 shares of JNUG at $6.83 looks like it is reversing.
Nice catch.
We got record breaking volume in JNUG today. 75M as of this writing.
Wow. I’m not sure whether that’s good or bad.
Sure it looks bad on chart but think about it. For every single share sold it was bought. Agree some of that would be short selling, covering but towards bottom I see new buying coming. GDX GDXJ NUGT JNUG were on BoW last time I checked. Now question is, who is buying all the way down?
Day traders have been jumping in and out of JNUG all day, that has a big impact on volume.
Makes sense
Yes, the daily volatility last few days is off the charts, been a great setup for short term trades.
Dec 23 was the closing low for CDE and AG as barometers. The right shoulder in gold is on the weekly chart.
GDX low was Dec 15. The trend wave is up. We have waited a long 5 months . . . .
Seer
Are you sure? Lol
Yes, I keep a manual log going of day closes. I read multiple sites, watch many videos and meditate. We are good.
Very meticulous of you, thanks for sharing.
Yeah, the actual action in gold was fine. I couldn’t figure out why we were down nearly 20%JNUG with gold off less than $10. That was pretty nuts!!!
The good news is that yesterday’s gap is filled, so we got that out of the way.
Steve … its good too see you here again!
Walk this Wayyyyy! 🙂
I have not been trading much lately. I went to cash right after the election and just bot back into miners starting last week.
nice timing for re-entry.. wish i could’ve said the same
Why re-enter at the lows when you can follow my system of buying each high? You guys confuse me sometimes!
ha!
Dream on!! Dream on…!
heckYEA.. . shoot….. i was already trying to hop over to his horse at full speed….
Lol !
hahahah… LOL #TRUTH
*sigh… i luv this place… it’s like going to “CHEERS” everyday … except I’m drinking coffee…
*now we just need a “Norm” so we can yell out his name when he comes in ….. ;o)
Update: Although we have only 30 minutes to go, I see some good news. My acct has gone from 5% down to 4% down. Also, working with TC2000 support, I was able to construct alerts in my watch list which tell me when I have green H-A candles in my stocks – green is good. Nearly all of my 30 min H-A candles are green and many of my hourly H-A candles are green. I am also seening some hourly buy signals trigger which would confirm (hopefully) that we have completed a pullback. Also it would be nice if gold would get off its bottom. Also NAK is sluggish here.
My account is not rallying as I hoped it would. Still 10 minutes, but …
I’m not too down on NAK yet. I mean, look at this weekly chart. https://uploads.disquscdn.com/images/ca45a45f785ade5498dc9356b00b1d97be6a1b6fc487ae12c3dc472cf6e19a9c.jpg
Other than the huge upper wick last week, she looks pretty good. I believe that the appropriate response here is:
*bort*
This week is a repeat of last week: all-time record volume on green Thursday which is exceeded on a red Friday.
Think the big boys are playing games?
deja vu all over again
A decent close considering. The back test at 194-195 HUI held and there was buying into the close.
Thank goodness. I was really sweating about 2:30-3:00!!!
The difference this time is that last Friday miners sold off hard in the last hour of trading. This time, buying came in during the last hour of trading (which is what I was hoping for on myJNUG day trade). So things are looking good. 🙂 I’m a longer term swing trader and my charts show miners switched to a “buy” (up trend) this week on my weekly charts for the first time since the first week of February 2016. They have been a “sell” (down trend) on my weekly charts since last August.
The biggest volume was the 11AM superslam, but a good bit of the volume alsi came with the end of the day buying.
What about May 2016, we had an ICL in MAY and I had a buy then
On my weekly chart, GDXJ was a “buy” in February and remained in an up trend until August. As you know, I don’t trade cycles I try to follow trends. Unfortunately, I foolishly ignored PM’s last year because I had been burned so bad in 2012 & 2013. I decided NOT to make that mistake again this year.
Sold half my JNUG to lock in profits. Will hold some over the weekend, may lighten up more before the close.
Steve! How are ya buddy. Long time no see, nice to see you again
Drop me an email, let me know how things are if you get a chance.
Hi Alex, I’ve been lying low for awhile. I’ll shoot you an email this weekend.
Ok, so I guess I was clobbered today like everyone else. And was REALLY worried about 2:00 or so. And I was WAY early on that JNUG entry. But the stay positive, I did have a very quick but profitable daytrade in JDST, JNUG closed above my buy today, and I lowered my recent JNUG cost basis by $1.70.
Not messing around with my miner positions here.
I am also long VALE old turkey from last May at 3.98. Trying to hold on for long term cap gains.
Working out so far.
Very nice on the VALE buy & hold.
NOT EASY with all of the consolidation that it went through this year, but the cap gains difference if you’re in the US is like 25% short term vs 15% long.
And as long as you hold it, you dont have to claim a thing.
Man, big volume came in at close on ETFs. Now, most of that is re-balancing NOT new purchases/sales since this is a ETF and very common. 30M today and 35M yesterday. Why? Trading interest. This can only happen with extremely high level trading in the underlying. So clearly metals have the attention of a BIG money traders right now. Something big still brewing. Volatility has been epic.
WEEKEND REPORT HAS BEEN POSTED
Hi Alex- I’ve done some reading this weekend on how POT, MOS and likely IPI are setting up so well due to the MJNA industry. It may be a way to play this industry as well. IPI is still holding that flag quite well. Also, have a look at AMRS, it’s just under the 50 day, possibly set to break out again : )
Thx Ann,
IPI is stuck between the 200 & 50sma. I’ve been watching it consolidate there, and it does look good.
I also like IPI s consolidation.