If it's a long term play, as RM said it would be, I'm not sure how healthy it would be, from a psychological perspective, to examine it on a daily basis. Perhaps reducing the monitoring to the weekly would prove to be more logical.
Most of my bread and butter trading is planned from start to finish. For volatile setups with a lot of potential to move again, if too much time passes without behavior I'd expect, I begin increasing my conditions to exit. In this case it will be something along the lines of closing above recent highs on rising volume. If it spends enough time below my entry fighting, I give it more room. Just how I see it.
Looks like a quick resolution of the sticky dislocation between gold and equities coming up. Both are headed lower in quick fits.
I called the initial drop in gold , but for some reason I've had a difficult time properly re-shorting the bounce. I added a little more size today at various points, but still not nearly sized up like I was a month ago. Why doesn't gold short right now feel 'perfect' like it did a month ago? Maybe more information will help: <b>Are the trend following hedge funds still long a boatload of gold?</b> This is important to figure out.
"Lately in a wreck of a California ship, one of the passengers fastened a belt about him with two hundred pounds of gold in it, with which he was found afterwards at the bottom. Now as he was sinking, had he the gold? or the gold him?" (John Ruskin, Unto This Last) Now, who is the dead and who found him?
OK, reading a few relevant recent articles has boosted my confidence. Paulson, Blackrock, and others look to be stuck long huge gold positions...
Ok. What was your initial rationale for shorting? You expected a quick drop with no meaningful delay or minor tests of your position? Or longer-term bearish outlook? I am just curious what trade rationale there was for shorting at recent levels that was subsequently invalidated just by the market ranging around a bit for a week or so. IMO if gold was a short in the high 1400s recently then it was a short at the same prices a week later. It's not like there was some clear news or catalyst that should have caused a move back down in 2-3 days. If the recent rally was a bear market pullback then a bit of ranging around is normal, no? I could understand covering if gold blew above 1500 on super bullish news etc, but if anything it confirmed your shorts by going a few dollars above the initial highs then reversing notably the same day.
Any self-respecting trend follower is short or flat gold, not long. The people still long are the 'fundamental investors' in gold, bottom fishers, and true believers.
To answer this, I probably should clarify that I took this position for 2 reasons: 1st was RM's call alone, 2nd was the structure of the setup. I had already went in blind on his first call because the setup was easier to take risk on, and cashed once it tanked. After such a volatile move got the attention of the entire market, what I look for changes. Before it was gut feel exit on lighter size, now it's a measured continuation with tighter exit conditions. Keep in mind I come from prop, where moves like this intraday were my basic fare day-in-day-out, until the algorithmic guys turned it all to chop. Since then I had to craft my own with a range of tools that no longer model one instrument alone, and also operate over weeks. BUT, when you get a rare berserk crash like this, some of the irrational cleanness of those old setups comes back, the relative tightness of price and volume actually means something. When you say gold's a short below 1400 regardless of your entry, I never think that way. I want to take larger size with either a defined risk exit, or a time exit, rather than a macro position. The longer it takes for everyone to watch and take sides, the more I start looking for a reason to go, and go back to my normal stuff. These moves are so rare and no longer part of my quiver. That said, still in, and it's starting to behave as desired, but the longer things go sideways the more binary criteria I add to close.