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Gold sold off about 1% yesterday and if you’re not short, you haven’t missed anything. The worst thing you can do is obsess over a missed trade or an opportunity you see after the fact. Two, this market was in a tricky range before yesterday’s sell off.
Here’s what you should look for IMHO:
1) Wait for the contract to rally up to the trendline and hopefully settle there. That’s at about $1170.
2) Sell the contract short on the reversal off the trendline. That is your lowest risk entry.
3) After you’re short, you’ll be looking to make sure that GC sells off and sticks. Make sure it takes out the lows of yesterday ($1729) and of 9/26 ($1738) and that it stays there.
The 20-day ATR is about $20. A good indicator of when to cover is on a day when you see the contract off $40.
Risk Management
If the daily vol is $2,000, you don’t need me to tell you that you should have between $100 and $200,000 in your account. Of course, some of you don’t, so you’re likely trading with leverage not by choice but by necessity. This is why you cannot chase something and that missing it is better for your mental health than some of the popular notions about how devastating it is to some to miss an opportunity. Get over it and don’t believe everything that you read on the internet.
You’ll miss plenty of opportunities regardless of your methodology over the course of your career. You’ll always have more than one chance to enter a trade. The moves worth being in don’t happen overnight and then “that’s it.” They last for weeks and months and there will always be a second chance to enter a trade for the first time.
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Further, you should always be uptiming and downtiming your trades. Look at the charts over multiple time periods for perspective. When you see GD in the weekly charts, you see it’s in a trading range. So what’s the big deal?