by Bill Downey     Price Analysis of Gold and Silver
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Technical Analysis Trading Gold, Trading Silver/ analysis By Bill Downey providing key turning points & charts for investors and speculators in Precious Metals Trading, and Precious Metals Markets

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Bill Downey, of Gold Trends.net, LLC, is an Independent Investment Analyst with over twenty years of study. YOU SHOULD NOT TAKE ANY MATERIAL posted on this WEBSITE AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED. Do your own due diligence. No one knows tomorrow's price or circumstance. The author intends to portray his thoughts and ideas on the subject which may s be used as a tool for the reader. GoldTrends does not accept responsibility for being incorrect in its speculations on market trend or key turning points that it may discuss since they are at best a calculated analysis based on historical price observations.

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Anatomy of short term silver trade

08 Mar 2016 4:54 PM | Bill Downey (Administrator)


The short term traders greatest enemy is trying to pick tops and bottoms on their trades.  

There are more losses generated in trying to pick tops and bottoms than all the other losses combined. If that is so, then it is the main reason why 85 to 90% of all traders end up losing their account money. 

This is not to say that there aren't times that one should look for a bottom or top, but the idea of trading them as a strategy is the single biggest reason of incurred losses.  There was an old saying the professional trades used to use when the Chicago Board of Trade first became the main trading hub of the grain markets.

"Top pickers and bottom pickers become cotton pickers."

When we think about it, trying to pick a top or bottom is about the most arbitrary thing one can do.  How do we know its a top or bottom before one occurs?  

Trying to pick tops and bottoms is arrogance at its best because it saying "i know more than the market knows."  "I am smarter than the other traders are."

Sure, the market lets you pick SOME tops and bottoms.  Just enough to make you think it can be done enough to yield a profit. But it's only really enough to lure and ADDICT you to it. At that point you are set up to think you're smarter than the market and that's when the market lets you have it by proving you wrong more often than not while systematically taking away your trading capital.

There is only two things that picking tops and bottom satisfies.  The first and foremost is EGO.  And the 2nd is selling newsletter and trading subscriptions.

The 2nd is only so because THE CROWD DEMANDS IT.  This is the reason why all the newsletter advertisements don't show their trading performance to lure new subscribers, they publish the TIMES THEY SUCCESSFULLY called a top or a bottom.  

The sad fact that picking tops and bottoms does not mean MAKING PROFITS.  Those who pick tops and bottoms are usually the biggest losers overall for the simple reason they keep doing it until they are finally right for once.  Unfortunately, the other losses when they were wrong add up to more than when they are right and eventually they end up losing all their capital and their subscribers.  

How many times have you heard the so called metal guru's (who are really salesmen for metal) tell you that the bottom is in.  Most have said so 10 or 20 times since 2011.  And it stands to reason they will pick the bottom on the 21st call and you can be assured that all the advertisements going forward will say --- WE PICKED THE BOTTOM.  And they did. But they lost all their clients money doing it over the past 5 years.  

The 2nd biggest reason traders lose their capital is because they OVER TRADE. They just always have to have a trade going.  If you always have to have a position on, your most likely ADDICTED to trading.  Even though you don't know it, that means your doing it for the Adrenalin rush and not for making money.  The markets always gives one what it really desires.  KNOW THYSELF. 

But this discussion is for another time and post.  Let's look at the last silver trade we did on the trading page.

First things first.  A TRADE is not a long term investment.  If you look at our recommendations, we have made only 1 INVESTMENT recommendation in the past 5 years for Silver.

We published this chart on Twitter at 14.06 silver and on our signals trade page and gold report when silver was 14.34 for our ACCUMULATE position.  At the time silver was at two long term trend lines and at the 200 month moving average.  Continue to hold this position and add should silver go to 10-12 dollars.  


On our short term silver trade, the chart below shows we entered at the 233 hour moving average at 15.08, and sold it when after a double top appeared, silver then proceeded to break the upper trend line at 15.62.  We did not pick the top or the bottom, as our main goal was to try and extract some money on a short term basis. When silver shows us another high odd set up,  we will trade again.   




In summary,  short term trading is not about picking tops and bottoms, but trying to extract a profit during a short term move.  

Trading is not investing so don't think you can trade an investment.  On the investment side, we've initiated an accumulate for silver at 14.06 and 14.34.  You're best bet is silver coins pre 1964 as they are the lowest in premiums and are most recognizable should they need to be used during a crisis.  They are also still recognized as currency, and thus should have the lowest potential for government confiscation.  


Technical Analysis :: Gold & Silver

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