GLD: semi-live trading

12-17-14

My trigger is based off of 

1) gold is in a monthly and daily downtrend

2) gold is in a daily squeeze

3) gold just had it's second close below the 21 EMA (purple line)

"Nice to have" factors:
1) The dollar has been very, very strong
2) The stock market has been rallying like a bat out of hell

daily chart (I'll try to make these more visible in the future)

monthly chart

Today I sent in the order for a February delta 60 put with a strike price of 120 for $670. I didn't try and get filled at a higher price because in this case I didn't want to be a dick for a tick. I just sent in the order for a price I was confidant I'd get filled at.

I was filled while I was at work and GLD dropped .68 cents which gave me a gain of $42.50. The trade looks really good right now but it could easy have a bounce so I'm mentally prepared for that.

My rules for exiting:  I'm only willing to lose half of the premium of my option, or two closes above the 21 EMA, whichever comes first.




UPDATE 12-18-14

Well we saw a bounce today, but the trend still looks fine since it didn't cross the 21 EMA (purple line). It wasn't exactly what I wanted to see. However, since I have my rules in place, I knew that no matter happened I wasn't going to have to worry about getting out of the trade so I didn't have to watch it at all. I lost 82.50 and now I'm down 40 dollars overall. Really, that's just how trading is. Will I lose more money? Tune in to find out!

UPDATE 12-19-14

Today was a typical lazy Friday. Nothing happened. It went down a little bit, I made 10 bucks so I'm negative 30 dollars on the trade. So far the chart still looks great but we'll see what happens on Monday.

UPDATE 12-22-14

Today gold did exactly what I hoped it would. It had a nice meltdown as shown on the 15 minute chart above. I made 187.50 today, which brings overall profits to 157.50 dollars. Could it have a bounce and erase all of my profits? Absolutely, but the chart looks beautiful right now and hanging on until it hits my target.


Daily chart

I calculate my target by taking that last high to low (on a higher time frame like the daily chart) and the target is 127.2% of the last move. I'm looking for gold to get down to about 1088 dollars an ounce.

UPDATE 12-23-14

It was another quiet day, gold had a slight bounce. It's typical for a bounce after a big down over, and the fact that this one was so small is nice. I'm expecting the trend to continue. Minus 25 bucks today, overall positive 132.50

UPDATE 12-29-14

Last friday, gold had a big bounce and it indeed erased all my profits and left me 40 dollars in the hold. However, it hadn't breached the 21 EMA and thus didn't trigger an exit. Today, it went down a dollar and left me positive 50 dollars. It's been kind of a roller coaster, but the downtrend is still intact.

UPDATE 12-31-14
It really has been a roller coaster ride. Trading this way is much more aggressive and you can feel every up and down move. Tuesday, I lost over a hundred dollars, and today I made it all back. The gold futures daily chart looks like it just fired short, so it *looks* good for a nice continuation of the downtrend, but I've said that before. You can see why learning to trade is very difficult, and that's why most people lose money. If the volatility doesn't get you, lack of patience very well might. I may not make money on this trade, but I've seen this set up make money in the long run.

UPDATE 1-7-15

I got out on the 7th, the day after it closed above the 21 EMA for the second time. I suspected the trade might go bad because the global economy is weak and usually that kind of thing is bullish for gold. The thing is though, is I've learned through hard experience that you can't second guess your trades based on the news. All you can do is follow the set ups that have probability on their side and ignore the news. 

I lost almost 200 dollars on this trade. I'm actually glad that I was able to show case a losing trade, to showcase what trading is actually like. Losing money like this would probably give most people axiety, and several years ago, this would have done the same to me. I barely noticed at this point in my life. That's because I've had many, many trades that have lost money, and yet I've been profitable the past two years. The first year of trading was the only year I lost money because I didn't know what I was doing and didn't have any of the psychology down. 

I really liked doing this, and I want to continue to post my trades in a semi-live environment. I'm making plans to build my own content management system since Blogger is not that good. 

See you next time.