Written by capsal
As a precious metal investor the last months of trading following the gold top at $1900 have been extremely challenging for making consistent profits. If an investor wants to continue being profitable he or she must quickly adapt to the fast changing environment of the market. Lets face it, we all wish it was late 2010/ early 2011 when the metals were going straight up for months on end but those times are behind us and might still be far away in the future before we see the same type of trending moves. This leaves us with taking quick trades to the long side (I am of the belief an investor should never short a bull market) once gold and silver finish a daily correction or take long dollar trades once gold and silver form daily tops.
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As of right now, I believe the metals are still in a much needed consolidation of the powerful advance from $800-$1900 for gold which could continue to play out until later this year or even next early next year. I see the December low on gold as significant in marking the bottom of the correction from $1900 although it is still possible to see a slight break of this low in the coming weeks and then another reversal.
While this consolidation is playing out my strategy is to protect my capital, maybe even make small profits on short trades so that once the metals break out again I will have the most capital possible to invest in the next powerful advance. Investors must be cognizant that these drawn out consolidations can quickly whip saw both bears and bulls in the process.
capsal
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