GLD Update

Yesterday GLD and SLV (which is up even more than gold today) were both featured as trade ideas for yesterday, I preferred some leverage for this particular position, but that could have been done with leveraged ETFs as well.

Here's the P/L and then the charts below.

As I stated in the entry post linked above, "This is really bad discipline" and from a risk management POV, it was, I would never encourage it, I would never recomend it, but at the same time I have worked with my indicators for a long time and I trust them and for that reason alone (the edge I knew I had), I broke the rules of risk management in not engaging in averaging down. 

I usually never do this, I call it "Throwing good money after bad", but like I said, I saw a strong signal and went for it. I think rules are essential, but every once in a while, a little discretion isn't the worst thing in the world, but there has to be an edge, not just averaging down, but doing it because you know you have an edge.


This first position was underwater, this is what I was talking about in the post above because I was cost averaging a losing GLD position with a winning signal.

The P/L came out to + 15%

This was an additional position added yesterday, I really liked GLD yesterday, what can I say...? 

The P/L came out to + 82% from a formerly red position and + $4200

In post trade action the thing I did right was to take a strong signal and run with it, but this was on a strong signal, I really don't remember the last time I dollar cost averaged something, I hate it and don't recommend it, that and the overall position size are what I did wrong, it worked out, I had a very strong feeling because of the evidence that it would work out, but it was terrible discipline and that's why I mentioned it yesterday as I opened the position.

GLD Update...

This is the 15 min chart of GLD from the negative divergence/distribution taking it lower to a 15 min positive divergence and numerous other timeframes as well.

 This is a closer look at the 15 min, from a relative positive to a leading positive and a VERY FLAT range which you know is something I look for.

I think there's still a lot of upside in GLD, but you know that I like to get out of options as soon as momentum starts to fade as the profits do as well. I'd rather open a new position and spend as little time as possible, the second trade was less than a day.

 Here the intraday 1 min is going negative, as momentum fades you can have higher prices 30 minutes later, but the call position is worth less, so capturing the total upside move is not what is important to me with options, capturing the momentum and spending as little time as possible in them is my priority.

As you can see, the 3 min chart is still in line so if I'm dealing with a GLD long or a leveraged ETF, I'd still be long GLD as price is price, it doesn't have the options pricing model that takes volatility and time decay, etc in to consideration, these are two different animals entirely.

As far as I'm concerned, that 15 min positive will take GLD higher, I want to let it tire out, pullback a little and see if we still have a strong positive divergence, if so, wash, rinse and repeat.