Spot Gold Trader looking for partner
I am a Hong Kong woman, aged 44, have 3 years+ Spot Gold Trading Experience.
I made enough mistakes and understood how to make mistake again and how not to. Now I need working capital for my Spot Gold trading. Aiming for a capital of US$10K-20K+ capital for a period of 1 year. Expect to return with 10% profit for 1 year (can negotiate).
We can choose to buy or sell in Spot Gold Trade.
Try to buy in a comparatively low price, hold the order, wait for the price to go up, then square (sell) the order.
Or, try to sell in a comparatively high price, hold the order, wait for the price to fall down, then square (buy back) the order.
The following are my comments, which I told my view to my friend, about Spot Gold, on 4th October, 2010. I said, if I had enough capital, I would buy gold at US$1,315. Then, within 2 weeks, gold rose up to more than US$1,400.
1. Firstly, let's see from technical point of view. Let's read the Monthly Chart. Moving Average (MA) are lined up in an upward order, 4/9/25/50/100/200 months MA, showing an upward trend. As this is a Monthly Chart, conclusion can only be made when the monthly closing is made.
Weekly Chart, mainly be used to judge the trend, Moving Average (MA) are lined up in upward order, 4/9/25/50/100/200/250 weeks, showing it is an upward trend. From the past 2 weeks, it shows the 4 weeks MA (US$1,301.83) is a good Support.
Daily Chart, mainly be used to judge the timing to enter the market. Moving Average (MA) are lined up in an upward order, 4/9/25/50/100/200/250 days MA, showing an upward trend. The angle of 4 days MA is around 45 degrees, is a very nice angle showing the uptrend is running steadily. However, RSI (14) is 82.4, anything can be overbought but still overbought. These few days, SPDR ETF did decrease its holding for a small amount. It can only be regarded as some investors wanted to lock in their profit. It did not imply the gold will fall now, but if SPDR ETF keep on increasing its holding and break the last record high, it will show more strength on Gold.
In the last 14 trading days, Spot Gold closed above 4 days MA (closed at 5 a.m. HK time). In these 14 days, Gold did drop within trading hours and showed support at 9 days MA for 3 days, while it also dropped below 9 days MA twice. But all these 14 days, Gold managed to rebounce from the lower price and closed above 4 days MA. It showed the strength of it.
Unless Spot Gold closed below 4 and 9 days MA for more than 3 days, then I will assume a short-term top be reached.
In an upward trend like this, a buying order at around 9 days MA, is considerated to be a safe trade. However, when Gold is strong, normally it is always trading above 4 days MA. If there is no sign of falling, what we can do is to buy around 4 days MA, hold the order and set a cut loss price below 9 days MA. Once have profit, set the Cut Loss price back to buying price, then we can let the profit run. Only when a correction appear, say maybe US$15-30, then we will see Gold trade at price around 9 days MA. Therefore, wait for the good timing to trade is important. A small correction can come at anytime with no prior signal.
2. The market now expecting FOMC will impose 2nd round Quantitative Easing in November meeting. If USA keeps on printing money, Dollar Index will keep on falling. While the market is looking for safe heaven, Gold is a very popular commodity and it is also be treated as another form of currency. So, recently, when bad US Data were announced, Dow Jones, Gold, other Currencies would go up, as the market expecting there would be bigger chance for Quantitative Easing, while Dollar Index kept on falling.
Last Thursday night, while a better than expected GDP was announced, some traders started to sell and gold dropped from US$1,315.85 to US$1,295.95 (it was exactly the 9 days MA), an almost US$20 drop, but the buying power rushed in at that price and pushed gold to close above 4 days MA again. Another factor that we needed to consider was, last Thursday night (30th September) was a Monthly and Quarterly Closing and some investors might select to lock in their profit, while some investors select to enter the market when the price reached around 9 days MA.
3. On 7th October, Europe and Britain will have Interest Rate Meeting. Traders will focus on the Statement of whether any Quantitative Easing will be made or not and it will affect Gold.
4. On 8th October, USA will announce Non-Farm Payroll and Unployment Rate. Any data that differ from what the market expect will influence the market a lot.
5. Sometimes, when a direction is not cleared yet, it may go up today but fall tomorrow, or vice versa. If so, we can do range trade, mean try to buy at the lower side of the range, then try to complete the trade (sell / square the trade) at the upper side of the range. If we do not square the trade, then the price may drop back and we will miss a chance to take profit. Then, we can sell at upper side of the range and square at lower price.
6. If we assume it is a single upward trend (big rise, with small correction), then we try to buy low, hold the order and wait for the price to go up, but we need to set an Cut Loss price so that if we go wrong, we only lose very small amount of capital. Once the price go up for few dollars, we can set Cut Loss price at our buying price (so that means it is guaranteed this order we won't lose any money); if the price rise further, we can set an Cut Profit price to secure a certain amount of profit and let the profit run. In a single upward trend, normally we don't sell. We will sell only after we have seen the price has reached the day high or the Peak of a period of time.
7. If we assume it is a single downward trend, then we sell, keep the order and let the profit run.
8. 25 days MA is regarded as strong / weak turning point. Two months ago Gold broke above 25 days MA and it hasn't touched back yet. So, if any correction happen, we expect 25 days MA can be held at least at the 1st time.
9. If I have enough capital to trade, on 4th October, I will try to buy at around US$1,315 and see whether it can break above US$1,320 or not. If it can, it may reach 1,32x but normally it cannot hold for the 1st time, so I will select to square the trade and take profit. Once the price reach the top of the day and can't break further above, it may drop back to seek the support (4 days MA or 9 days MA). Wait to buy again at support. 4 days MA (this MA price will keep on moving until it has reached its closing time) is US$1,313.87 while 9 days MA is US$1,304.17. A meaningful cut loss price should be set below 9 days MA, or below US$1,300.
10. I expect much more higher Closing Price will be made.
If Gold close below US$1,318.4 or below 4 days MA, then it may be a pre-mature signal only. But if Gold close below 4 days and 9 days MA for more than 3 days and a Dead Cross is formed (4 days MA is lower than 9 days MA), then we can assume a short-top may have appeared.
11. Discipline is very important in trading. Must set Cut Loss Price. Never let 1 trade lose too much capital.
12. Trend is our friend and Sky is the limit. No need to predict the top or the bottom. We can see from the charts after the top or the bottom is made. Only need to follow the trend to trade and must set Cut Loss price, that will protect the capital.
13. Just want to show you an example on how to calculate profit. For example:
Bought at US$1,315, for 100 Oz order.
Sell / Square the trade at US$1,322.
The profit will be US$1,322 - 1,315 = US$8.
As it is a 100 Oz order, the profit in amount will be US$8 x 100 = US$800.
Normally the market is slow in Asian timing, movement is around US$5.
It will start to move in large range after entering into European Hour.
In USA hour, when Gold Future market is opened, or when Data are announced, or when FOMC / Britain / Europe announce its statement on interest rate meeting, or any FOMC official deliver a Speech, it will influence the market a lot. The volatility of Gold is large (+/- US$20, 30, 50, 60 or even more than that) and therefore a back up capital is preferable in long term trading.
