Last 991.5- Break of weekly triangle at 977 exhibiting encouraging upside momentum (unlike recent TL breaks in FX which seem to have fizzled out somewhat)
- Much more significant test of resistance on monthly chart going on now. Close above 990 for Sep09 would be positive
- Ability of gold to rally in face of recent attempted USD strength another positive
- Upcoming chart points = 1005 and 1031. Very important levels
- Weekly triangle upside objective is appx 1108. Stop out if triangle damaged by subsequent price action.
04 September 2009
Gold : Attempting Break on Monthly
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3 comments:
hey taichi
i've been reading ur blog since the 'old blog days'. When you put on a trade, do you have a stop loss? I have been learning so much from you, thank you!
Usually no hard stops set. I compensate for this "high risk" by keeping positions really small. I only stop out of trades when the technicals I was originally looking for are CLEARLY invalidated. This is what I mean by "fuzzy exits".
In the case of the EDM0/Z0 spread recently, a clear hard stop was evident after watching it for months and thus, I was able to run a much bigger position in the trade than usual.
Something that I covered in the old blog. Concept of Type 1 and Type 2 errors in statistical hypothesis testing adapted to Trend Following.
Type 1 error = Good trade exited pre-maturely
Type 2 error = Bad trade exited late
For me, I can live with higher incidences of Type 2 errors as a trade-off for avoiding more costly Type 1 errors. When a market trends, I do not want to get stopped out due to noise.
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