A trade underway


While in a trade it is important to remove oneself emotionally and review its standing. One has infinite choices before entry to make up ones mind and to stack edges upon edges for considering market participation. Once a trade underway, money committed to the market, there are only four choices left.

  • Do nothing and simply let the trade evolve.

  • Get out, for whatever reason.

  • Take partial profits, or

  • add more and build a larger position.

This limited field of options with ones capital at risk, makes one vulnerable to emotional bias.

Anticipatory planing for and entry has now shifted to reactionary trade management for an exit(s).

Reviewing ones trade from time to time especially the longer time frame ones, with a clear head, is beneficial.

With entries of a price of $14.776 on the 15th of May and $14.372 on the 30th of May, we averaged into our long term position at a competitive entry level. Buying into the prior 4 month price decline this aggressively allowed for a relative small stop in relationship to the reward potential.

The wide double bottom spanning over a 2 year period provides assumed support.

Anticipating a price climb, this chart shows that near the $16 level to be a distribution zone where partial profit taking could increase ones odds of success.

Silver, monthly chart as of June 14th 2019, large time frame support:

It was the trend line support on this high time frame in addition to this double bottom support that allowed next to other edges for such aggressive participation. There is no knowing if a trade will work out but if odds are in your favor, a call to action is efficient. Only time will tell if this particular trade is a winner within ones sample size of trades.

June 14th 2019, Silver/US Dollar, weekly chart, “we have a lift off”:

This weekly chart shows clearly, prices having left the entry zone. Ideally we want to see no price declines below the upper yellow line. One reward of such aggressive entries, as we have used on this trade, is a chance of a possible price bounce (action-reaction principle). An additional edge of risk reduction. In this case it worked out.

Weekly chart June 14th 2019, Silver/US Dollar, math on our side:

The green band marking the entry zone bandwidth of price shows to be over two standard deviations apart from the mean (yellow dotted line). Another edge that helped support confidence for entry. Digressions from the mean have a probability to return to the mean. Prices should slow down once at the yellow dotted line and ideally from there we move in “creep fashion” after a retracement, to higher price levels.

Gold chart (daily time frame) of June 14th 2019, sector support:
Focus on the details

When a trade is underway one should aim to look for all the small signs of strength or weakness. Getting a feel of how healthy a trade is, is what supports good mentality and prosper trade management. Most traders make a plan previous to entry and follow it strictly. For novices a very wise decision, to not have ones emotions get the better of oneself. Later in the game it is this trade management with detail focus that improves profitability.

In our case gold gave away the sector health with its entry zone behavior. The chart above shows that the strong resistance of $1300 was easily overcome. A steep move and good percentage return in a short period of time shows overall strength. The newly formed cup and handle bullish formation, providing for a larger time frame entry signal, fosters fresh money possibly joining in.

At a time where we as aggressive players are out of our entry zone, larger players might be stepping forward and possibly causing a struggle zone. This is an ideal positioning scenario- Now simply sit and wait and keep risk exposure to a minimum.

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All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

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