XAU/USD & XAG/USD - Gold & Silver Traders Thread

Hi all,

I noticed over the weekend that the Oct advance had retraced exactly 62% of the Aug/Sept decline. This gives an ambivalent signal, since it implies that we could be in for additional lows in a 3rd wave down. At first I thought this was only a remote possibility but observing PA today, there is also a potential H&S building in H1. The PA since Friday's low appears to be forming a right shoulder with neckline around 1305 and pattern target ~1,250

No confirmation of this yet, but worth noting on the chart.

The count is unclear at the moment in my opinion... need to let this play out

Combining the H&S on your chart with the potential H&S forming in H1 could mean significant downside. Hope this doesn't play out - I wanted to harvest the pips to the upside. But who cares? Pips are pips right? So long as they are green.

Hi Ramses,

Yes indeed: PA can swing both ways and the counts are equally valid.

I realized over the weekend that the Oct advance can also count as a zigzag (e.g. replace III & IV on your chart with ABC) and we have a valid equal-leg zigzag. That said, it also means the Aug/Sept decline can count as an impulse wave 1 to the downside with the recent advance being its wave 2 (having retraced exactly 62%). I don't like the look of it but no use being in that great African river, De Nial, about it.

My 1318-1332 trip back to 1320 didn't work but now I figured out how they wil play the move in gold !

What i've learned is that there are plenty of clear setups across this market and that avoiding these 50/50 toss-ups is the only way to make it in the end.

Right you are - best to give this one time to make itself clear.

Am I the only trader using the 1 minute charts to place trades at the High and Low of each day? I am really interested to know how many of you manage to get your odrers in within $0.75 of the turning points on a daily basis. Many have said this is impossible, but I manage to do this fairly regularly. Today I nailed the turning point at 1321.4 and never really looked back since then. Since I am only testing a new system, I have placed £100 for trading which means I am now £17.40 or 17.4% richer for doing so. Had I been watching more closely, I might have hedged at 1313.5 for such a rangebound day.

As a matter of interest, I don't use TP at all. I use stops only if at all. Cautionary note to newbies: no stop is a bad idea until you know what you are doing... and even then you still have to be very careful.

My next discussion will be Faded loss management strategy: managing to recoup losses from a losing position.

The market never fails to give opportunities... that's why I also feel it to be prudent knowing how to trade at least 3-5 different instruments.

Buying a little silver and platinum bullion today. Looking to see silver a little lower it it breaks 50% Fib and buy a little more. I still have a bearish gold outlook short term. I just think we can buy it lower than it is now. I choose platinum this time due to the industrial uses, it is looking to be in high demand with potential shortages in 2014. I may even look towards palladium too.

hi Pip Anon,

Good Luck with your metal trades.

edit: interesting about the potential Paladium shortages next year - sure to benefit your trade.

hi Rhodie,

I use the M1 chart for entry timing as well as wave counting. My entry is always on the 3rd wave so I don't nail the high/low but I can appreciate how you do this fairly accurately on M1.

Looking for a sell right now on Gold, it has broken out of my channel, waiting for a close below it and I will be selling on the break of the closing bar. Wish me luck

What tf you use?

Totally agree with you, should stay out of the market when it gets to this ranging section

Faded loss management strategy: managing to recoup losses from a losing position.
"Forget predicting market moves. The future is invisible to all except the creators." -- first lesson in trading

As traders we have the uncanny ability to fool our minds into believing that the market will move in a particular direction. This exposes our trades to bias sourced from human error. A recent study produced some interesting results and were published on Business Insider (dot com). The results made me think carefully about how we think as humans and the amazing susceptibility to failure we have and that we actually look for failure as an excuse to continue losing and exonerate our conscience from our glaring mistakes. I am no scientist or doctor of psychology, but I do have insight that may assist some of you to be better at your own discipline. I often have written that it would be better for many of you to throw out what you know and trade with what you don't know for a very significant reason: you don't know. Nobody "knows" what is going to happen. That is a powerful position to be in as a beginner and as an advanced trader. Too much knowledge and not enough wisdom is a dangerous combination. Teach a young child to start a car engine and leave the car keys in temptation's way are going to lead to disaster eventually. The same can be said of trading: teach bad ideas to a beginner and they will make a loser appear to be a winner in their own eyes.

If we all knew what was "going to happen" we would all be wealthy and the world bankrupt and on TOP of ALL that, trading the markets would not be the niche business opportunity it is today. There is not a single indicator in the world that can predict the future. Actually there is, but if you buy it you would soon discover that you had been scammed and lost a load of money out of desire to believe the impossible. We have to trade with the market and not trade with our belief systems. Many folks have mistaken their trading systems to be prognosticators of good fortune. When viewed scientifically, that is the definition of a religion. The best thing we can do with religion is keep it in their sanctuary and not in our trades. So the question we need to ask ourselves daily is this: "History is cyclic, is this event a recurrent action or a personal hope?" Any trader worth his weight in gold will tell you that trading based on hope/ambition targets/dreams/alien fractal transmutation is doomed to failure from before the trade starts because the mind is aligned to the emotions and not the market.

This is not a comprehensive tutorial, but an idea resource for your personal enlightenment. Any information you apply as a result of reading this is entirely at your own risk.

Should you ever find that you are trading a losing position, you ought to hedge your losses. Of all things we have control over, we control what we lose. To trade your way out of a losing position takes control over emotion and an astute mind for the more intricate workings of the negative balance sheet. Banks buy debt. Debt collectors buy debt. Nations trade with debt. Global corporations buy and sell debt and even invest in debt. A credit card is actually a debt management account. Is there any reason you can reasonably think of that such a magnificent thing as debt can be a loss best accepted and forgotten? If, sitting where you are reading this article has left you slack-jawed and a little confused, then you have a lot to gain from what I am about to write here. Debt is the reason you are trading a market at all. Without debt, the markets would not operate correctly in the modern age. Debt is the meaning of life when you trade. Debt is the forgiving edge of the market that says you are allowed another chance if you can figure a way out of the mess you created... the hard way. And it is a long, hard way out. Sometimes you can win big if you work hard at it, or lose less than expected if you're impatient and refuse to accept that truth. The more ignorant person is likely to ignore everything here and move on as before, losing more than needs be.

Debt is an asset. All accounting folk know this. It is an asset you can trade with. Once that asset hits your balance, you are trading from a loss. As long as you don't let that asset see your balance sheet, you are going to be ok. Don't believe it at all, your heart tells you. If you have a balance of £1000 and a hedged loss of £760 in a moving market, then you have a fighting chance to get out of that mess and still win. As soon as you claim that loss as your own, then you admit defeat and end up poorer for it and in a worse position than if you kept that debt alive and prisoner in an hedge. As long as you have an hedged debt, your margin is not active. Single trades have a call on your margin whereas opposed or hedged trades do not. The catch is to ensure that your trades are equal in value with the simple formula of:

postive equity = negative equity; n(Long) = n(Short); (1.5+1022.25+0.25) long = (506+109+259+150) short OR 1024* long = 1024* short.
That, my friends, is the long and short of it all.

Once you achieve equilibrium in your trades, you have a fighting chance of extricating yourself from your debt provided you are not margin-called. Your equity management is all important. It is possible to accrue debt and trade out of that loss position using an hedge because your hedge only uses your equity, not your balance. Your balance is only affected when your equity is converted to a balance through trade termination. How you terminate your trades can easily determine how you trade into debt or out of it. Hedges are delicate things of desire and ambition that can ruin the foolish into thinking that they are profitable. Hedges are a tool, not a resource. You don't use an hedge to gain money, rather to extract money from the resource of the market. Your greatest asset in trading the markets is your mind and not your emotions. Fear drives the market, faith does not. Fear of losing is what moves a market, and faith in your ability to stand by your decision makes or breaks a person's account. Neither has a religious viewpoint, or someone might have been orating about conversion on street corners, et al.

If you hedged a losing position early, you have a fighting chance of rising up from the ashes of that bad decision. Once the market bottoms out on that leg of the period you are trading, drop your positive equity boundary by 10% for each 10% rise towards your negative equity bid of the highest value per lot. Each portion of trade you drop leaves you in a position of net long or short depending on which direction the market is moving. This is the Debt Fade. Make sure you place a stop or limit trade of equal lot above or below the current prices. Eventually the debt being profitable begins to make sense as the market moves more and more in your favour having already claimed a profit from the collapsing hedge boundary. It is possible that you trade into a positive balance from having aquired negative equity trades because of the profit claimed before the market retraces to the loss-making equity that magically seems to reduce in value as the market approaches that price level and eventually exceeds that level where you posted your hedge boundary to accelerate your equity above the balance prior to the original loss value.

May your thoughts be pure and unfettered by opinions. If your rules are losing you money, then your rules are wrong. Focus on the present, educated by the past and plan for the future. That which is in the future, is a loss in trade now. Clear out the garbage and invest in clarity of thought. You are not trading to gamble away your investment, so don't gamble away your trades by investing in anything that is not easily apparent in the chart in front of you. The charts and graphs of live trade generate news, they are not directed by news serivices. Don't begin to think that the tail wags the dog. Fade your losses by selling your positive when the market changes direction at the lowest/highest point of the day and place market limit/stop orders well behind the market as you do to prevent further losses and to keep out of trading more orders into that hedge any further. Do not forget to remove the limit/stop orders as you trade into positive balance from positive equity. Always ensure that your equity exceeds your balance substantially before removing those trades. Remember that it takes a long time for the market to bottom out for the day and no merket moves in a straight line for very long.

Later on you may regret that decision as the market tends not to move much until at least the London open times of 08h28 GMT. You may have a winning trade on and not realise it yet. Imagine your 0.1 lot earning you a bonus $40 for being paatient and leaving the market to take your profit higher. Just my opinion based on our rules that actually work:

Never trade without a coffee (it gives you time to consider everything and reduces the chance of impulse orders.)
Only trade at the high or low of the day from 10 mins before London opens to 5 mins after it has opened;
No further trades allowed until between 10h30 GMT and 16h50 London time (not GMT) except to hedge against extreme loss circumstances
Always use stops for primary trades.

It's Ok you can short it now. Gold just wanted to kiss the Daily pivot before heading down again..........

Hey, what do you mean wanted to kiss the daily pivot? I cant seem to see that on my 15min chart

I have it on my 1h chart usually but you can put it on any chart.

Hi KiwiOz, thanks for the reply, I don't exactly understand what you mean with your daily pivot on any chart timeframe? Then what indicator do you use that draw out those cyan lines on your chart? Do they project the levels?


Don't worry, I worked it out, do you use this for intra day scraping like we use fib levels? I see it is above its pivot point at this stage, having some support at the pivot point? Do we wait for it to cross it to look for S1?