I want to come back real quick and discuss the NG trade while I have some time. In the chart below, you can see where price went above the top Bollinger Band. In my experience, when price is over the top Bollinger then it doesnt survive for long. It will probably take a few days of sideways trading for it to get under the band and either continue its rise or fall. Bollinger Bands and Moving averages are the only indicators I utilize in my trading. I do look at RSI from a larger big picture perspective. For example, when the RSI for the indexes is below 30 then in the past it had represented a buying opportunity and an indication of being overbought. In a bull market, usually the RSI spends its time in between 50 and 90 going back and forth. RSI just gives you a general soft perspective, but it shouldnt be the primary reason to get into a trade. Of course, if price continued to run higher. Lets say it made it to 6 then there comes the typical "trader guilt". You cant have that guilt. In my experience, whenever I bought a security that went over the top line then I have experienced the "stick". The rules I play by is to sell when something is over the line. Miners can also be very volatile stocks...especially the single digit small cap variety that are only eeking out maybe a few million in revenue per year We might come back to NG in a few days. My experience is that probably by Tuesday it might be ready for another run.
I went through different solar stocks throughout the day. I looked at how SOLF was trading and it made me a little uncomfortable. I thought it might be good, but then the first hour or so of trading made me think again. I find its best to watch the stock for the first hour or so and see how it trades before making the decision to go in. I did find one solar play that looks good and might have a few days to run. That one is YGE.
I have been trading solar stocks for a couple of years. They move agressively. Based on reversal candles I mentioned I did extremely well on those 3. Please look at them now, SPWRA formed morning star candles. STP formed another hammer, YGE formed another higher higher low. They are super good stocks to day trade.
I use the BB (bollinger band) and CCI indicators. To me, they work better together than MACD (a little behind indicator). Financial stocks are volatile too but stocks like AIG is so unpredictable. Pick stocks that we can predict the move, how they react to the index, oil, etc. HIG BAC are easy to trade. GLD hit resistance $97.5 $98 level. It was at this level in feb. and last july. When the guests on CNBC all saying that we all need gold then for short term, pull back is coming, doesn't have to be long but we can trade. Take a look at RTK, good story and great potential. This little one can help our porfolios in a nice way when they get a military contract. Chart is bottoming. I like to write down my thoughts/ideas. I review them to see how I do with what I see. SVA is a stocks that we can trade and make good both ways. I shorted from $11 to $9 and went long from $9 to $10.42 (sold pre-market).
Tonight I want to elaborate on my thoughts on the psychology of trading. Previously, I had researched SOLF and thought that it was a good stock to trade. I put some time into the research and making a chart. I was really set on it. Then I watched it for a while and it just wasnt moving the way I liked...the money making way. So I decided that YGE was probably the better bet. On another message board and this one, I think I said my target was 980 on the short term and then after that it would sink to new lows in October. Then the market these last few days didnt really fall out and after watching it for a while I decided it might go to 1017. In the morning, this analysis might change very quickly again. I bought NG and had hopes for it to shoot to 6-7. Then after studying the situation more and observing that gold might not make it over its previous high then I sold the position in the pre-market. This all may seem a little "bi-polar" and on a message board it definately comes out as such, but I believe thats the psychology one must have to be in this game. You cant ignore the obvious because your analysis dictates otherwise. Many folks are not used to changing their mind or admitting that they were wrong so this is a tough battle for them. I read on this message board about a guy who bought UNG at 12 and did not sell it until 9. He should have sold it at 11.99 in my opinion. Its much easier to admit you were wrong, take the small loss and then join the other side of the trade...i.e. shorting UNG versus buying the common. In trading the markets you must be "bi-polar". You must be flexible. These are things we are not taught to do growing up, but we have to learn fairly quickly and adapt to these new normals...