You will find the word principles being used often in our publications. This is based on the phenomenon of market speculation to be counter intuitive. We can solve most problems by relying on our experience and gut. It is by far the worst to do so in investing. Usually we orient ourselves measuring against peers. So who knows if the neighbor tells the truth about his riches and has not gotten them through inheritance. Which elaborate stories about market speculation success are true?
Think tanks filled with chess world champions and rockets scientists have failed to harness the elusive market. This means a strong left brained approach isn’t the solution either. How about modelling those who succeeded with proven record? Well, if you followed funds who had astounding track records in the multi decade bull run and invested at the end of the last century you also lost your money. Some of these trend following champions went belly up. As trend followers, they had no clue of how to trade sideways or declining markets. Luckily there are principles – solutions to any problem.
We need trading principles
Speculators need principles that guide them and provide that stability that is missing to own confidence. A vital ingredient to success in market speculation. Just like we lack a sense to measure time and need devices to measure it, we also do not have any intuitive relation to probability. Intellectual reflection simply isn’t enough to act upon such needed concepts in a proper manner. We need devices like watches to become confident in a surrounding where our senses have no bearings.
You will find by reading through our past publications in this silver series as well as our weekly crypto currency chartbook a trading principle in almost each article.
It is the sum of these principles that create our high probability of predictability of the market, as well as our stable hit rate and solid risk/reward ratio. Above all, it allows for a calm mind to execute trades.
This approach is most needed in environments like the recent uncertain topping/continuation formations to stay emotionally neutral.
Daily chart, silver/US Dollar 10/31/2019, “sector strength rotation” :
Silver in US Dollar, daily chart as of October 31st 2019
On October 31st the precious metal sector experienced, not untypical at the end of a month, strength rotation within its group of instruments. Gold in particular showed first signs of weakness. This alerted us to reduce our exposure size of capital towards the market. We posted our exit point live in our telegram channel.
Principles – solutions to any problem, Silver, 60 min chart, 10/31/2019, “more profit taking”:
Silver in US Dollar, 60 minute chart as of October 31st 2019
This 60 minute chart shows more clearly the specific exit timing within the trading day. Three days later the last 25% of exposed capital got stopped out at break even entry levels (see quad strategy).
Silver in US Dollar, Principles – solutions to any problem, November 6th 2019, daily chart, “weekly long entry”:
Silver in US Dollar, daily chart as of November 6th 2019
Prices retraced back within the supply demand zone (= prices between the green and red horizontal lines). This warranted again for an entry. It is this cat and mouse game in struggle zones between time frames and possible continuation patterns on the one end and topping formations on the other, where the mind can play tricks. Trying to find direction of the market is simply not the solution for the speculator. It is here where a neutral stance is necessary. Subsequently market participation being solely based on high probability and low risk entry points.
If you find the time to read through our past publications and contemplate the various trading principles, you have in their sum a true edge. Consequently a true guideline to maneuver through the vastness of market variability, a roadmap. By stacking these principle edges you will find yourself a step closer to be independent of the good opinion of others. It is this independence that stops the chatter in ones mind of whom to follow and what to belief in a field of constant uncertainty. It is like wearing a watch and measuring time, rather than guessing what time it might be.
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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.
Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.
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CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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