The Gold Trade that went wrong earlier this week
Earlier this week we sold Gold (those that followed my Tweets would have got this info in realtime). The reason for this was for a couple of reasons.. the underlying trend in the Daily charts as you can see had been down and there was a marked resistance line. One the day that I had shorted this, I could see that the price action had reacted to this line and was starting to move lower. Of course, it was only temporary and the market went higher and took out my stop!
I do use the Moving Average lines as a guide (that’s the green line). I do have a general rule which says that I am only short when the price action is below the line and long when the price action is above the line. As I said, a general rule but this did flag up at the back of my mind when I had placed this trade. However, with the more concrete facts such as the price was in a downtrend overall and that the resistance line had been hit.. it seems like a good trade.
It was a 120 point loss on this trade!