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XAU/USD & XAG/USD - Gold & Silver Traders Thread

  • #26,281
  • Oct 8, 2013 10:13pm Oct 8, 2013 10:13pm
Quoting TheArcher
{image}
A Rookie says - have you tried Andrew's pitchfork?
A trade should be based on an assumption based on facts
  • #26,282
  • Oct 8, 2013 10:50pm Oct 8, 2013 10:50pm
Quoting Mave
{quote} So, by following the data and bank related news one could get a general sense of the direction we are headed in? 2 month bond yield inc. by 25 basis points, what does this mean?

hi mave,

I don't understand macro economics as well as i'd like. Understanding bonds and their yield curves and the bond cycle is a "must-have" but i am a beginner in that knowledge. What i do know is that investors and central bankers view bonds with regard to a traditional cycle whereby bond yield rates increase and decrease over decades. The current rise in bond yields is premature - they are rising too fast too soon - and this spells danger for the bond market and the economy in general. The spread between the 1 year and 10 year Treasury bonds yield rates is narrowing - which is a "bad thing" at this time according to mainstream economic thinking. When the spread narrows to a critical level (not sure what % exactly) then there is the risk that bond holders will start selling and this sell-off will cascade through the global economy - basically pre-empting massive Risk-Off.

http://www.minyanville.com/business-.../2013/id/51912

and here is a mainstream article (from Aug) discussing the subject:
http://www.marketwatch.com/story/tre...ppi-2011-08-17

When you read these things, it is often difficult to understand, since a lot of assumptions are made regarding the reader's existing knowledge. It helps to go to Investopedia and read up on bonds to better understand the traditional thinking and expectations. Being in the market nowadays it is critical to understand bonds at a basic level - the prematurely rising Treasury bond yield rates is one of the main reasons the Fed are painted in a corner.

Quoting Mave
So, by following the data and bank related news one could get a general sense of the direction we are headed in?
I'm no guru, but i'd say yes and no. Yes, because the data shows, for example, that inflation is not happening despite Fed efforts to induce it. No, because the data does not actually matter in a period of mania and irrationality: Firstly, the data is cooked. Secondly, sometimes "good" data leads to, say Eur/Usd, rallying and sometimes "bad" data makes it rally even more! To get a deeper more meaningful picture of where we are heading, you have to look at the true driver of the markets: social mood

http://socionomics.com
cryptocurrency everytime
  • #26,283
  • Oct 8, 2013 11:06pm Oct 8, 2013 11:06pm
Quoting venzen
{quote} hi mave, I don't understand macro economics as well as i'd like. Understanding bonds and their yield curves and the bond cycle is a "must-have" but i am a beginner in that knowledge. What i do know is that investors and central bankers view bonds with regard to a traditional cycle whereby bond yield rates increase and decrease over decades. The current rise in bond yields is premature - they are rising too fast too soon - and this spells danger for the bond market and the economy in general. The spread between the 1 year and 10 year Treasury...

Understanding bonds and their yield curves and the bond cycle is a "must-have"

Didn't know, Glad that i asked ..

I'll ask more directly. Yields are basically debt sold off to investors, if I'm right. Now, there's a rise in 2 months bond yield. So,
1. investors are not very positive about the whole scenario 2. they're sending warning signs to the government
Add more options?
A trade should be based on an assumption based on facts
  • #26,284
  • Edited 11:43pm Oct 8, 2013 11:32pm | Edited 11:43pm
Market technical are currently aligned with a great speculation on Yelen being a SUPER DOVE

I'm massively exposed to silver. Significantly more so than I ever have been to any currency or stock.

But I have a $2.60/oz cushion, I cashed out $19.50 to $24.40 and bought the the same size again at $21.80

If we ever get to $13-$15/oz I will put over 50% of all speculative capital into silver.

I basically just trade the metals long term... If there was more liquidity (one day there will be), it would be a great market to scalp/intra-day.

Currencies still best for scalping and short term trading.


XAGUSD Monthly (log)
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Be hopeful in a winning position, and fearful in a losing position.
  • #26,285
  • Oct 8, 2013 11:45pm Oct 8, 2013 11:45pm
Quoting Mave
{quote} Understanding bonds and their yield curves and the bond cycle is a "must-have" Didn't know, Glad that i asked .. I'll ask more directly. Yields are basically debt sold off to investors, if I'm right. Now, there's a rise in 2 months bond yield. So, 1. investors are not very positive about the whole scenario 2. they're sending warning signs to the government Add more options?
Quoting Mave
Yields are basically debt sold off to investors

Nah, that's not it - one buys a bond for a price (coupon rate) but it has a yield - because you're lending the Government a sum of money (the coupon rate) you get interest (the yield rate) paid on your loan. So buy a 1year bond for $100 at 1% yield and (theoretically) after 1 year you sell it for $100 and get $1 (which is 1%) interest (yield). But it's not that simple because the price (coupon rate) and yield both fluctuate in an inverse relationship.

To understand this, you've got to study. Don't stop reading until you know everything you want to know. It should keep you busy for an hour or two, but here's a start: Bond prices and yield - http://www.investopedia.com/university/bonds/bonds3.asp

As background: this idea of buying government debt as a safe investment comes from the good old days when Western Empire was in it's heyday. Gentlemen made agreements and honored their word (most of the time) and everything happened slowly and predictably. Owning bonds in the 20th Century was a good idea because it paid better interest than a bank deposit; the government was, well, the most respectable entity that existed; and also meant you could "hold fort" with the Joneses. Those days are gone. The global economy is like the Titanic - it's still floating but the lower decks are flooding one by one. The government and central banks are now proven to be corrupt and inept entities that exist for the enrichment of a few. The bond market, which is like the Rolls Royce of the investment world, is running on fumes and the next turn-off is to the junk yard.

And that's what inspiration you can find in one cup of coffee!
cryptocurrency everytime
  • #26,286
  • Oct 8, 2013 11:52pm Oct 8, 2013 11:52pm
Quoting Rag2RichesFX
Market technical are currently aligned with a great speculation on Yelen being a SUPER DOVE I'm massively exposed to silver. Significantly more so than I ever have been to any currency or stock. But I have a $2.60/oz cushion, I cashed out $19.50 to $24.40 and bought the the same size again at $21.80 If we ever get to $13-$15/oz I will put over 50% of all speculative capital into silver. I basically just trade the metals long term... If there was more liquidity (one day there will be), it would be a great market to scalp/intra-day. Currencies still...
some thoughts after reading your post:

Silver is a great mover, and like its big brother Gold it is volatile and unpredictable. The metals markets are crowded with all kinds of carrtels and contesting players tugging in opposite directions. Evenso i like to trade Gold, intraday and with a small account balance. You just have to wait for the moves (and learn the fake-out telltale signs). Silver is a bit easier on the wallet, but you have to trade small and with wide stops to accommodate the volatility. Once trend develops I would consider a longer term position in Gold but right now things seem too unstable with the Titanic sinking and all...
cryptocurrency everytime
  • #26,287
  • Oct 9, 2013 1:16am Oct 9, 2013 1:16am
Quoting venzen
{quote} could very well do that. I find PA very strange and difficult to trade the past week.... waiting for some direction out of this zigzagging knot
I agree, my view is that today there would be a dip to 1297-1290 and it would be the point where it might explode up.

Later I expect it to go wild above 1335 to 1350.Then after a battle at 1400, with a similar price action at 20.12.2012-07.02.2013 it might print prices above 1400.
  • #26,288
  • Oct 9, 2013 1:28am Oct 9, 2013 1:28am
Quoting venzen
{quote} some thoughts after reading your post: Silver is a great mover, and like its big brother Gold it is volatile and unpredictable. The metals markets are crowded with all kinds of carrtels and contesting players tugging in opposite directions. Evenso i like to trade Gold, intraday and with a small account balance. You just have to wait for the moves (and learn the fake-out telltale signs). Silver is a bit easier on the wallet, but you have to trade small and with wide stops to accommodate the volatility. Once trend develops I would consider...

Hi Venzen,

Thank you for your posts, they are very informative, bonds gold silver views was quite a good reading.Could you give an example to those fake-out telltale signs and how to spot them in gold ?

Regards,
  • #26,289
  • Oct 9, 2013 1:59am Oct 9, 2013 1:59am
Gotta love it when Magnetic (DeMark) lines & Fib's agree........
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Money Makes Money
  • #26,290
  • Oct 9, 2013 2:00am Oct 9, 2013 2:00am
Quoting okanemici
{quote} Anyone interested in gold might put a 1316 sell stop order now and thank me later
Yesterday, you said it'll be start on 1316...
  • #26,291
  • Oct 9, 2013 2:12am Oct 9, 2013 2:12am
Two month speculation of silver for fun, don't take this serious
I don't have a crystal ball


https://www.tradingview.com/v/ZkrQqizf/
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Be hopeful in a winning position, and fearful in a losing position.
  • #26,292
  • Oct 9, 2013 3:10am Oct 9, 2013 3:10am
Gold on crossroads. Move higher or move back to the channel bottom. No bias. Watching PA
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  • #26,293
  • Oct 9, 2013 3:37am Oct 9, 2013 3:37am
Quoting okanemici
{quote} Hi Venzen, Thank you for your posts, they are very informative, bonds gold silver views was quite a good reading.Could you give an example to those fake-out telltale signs and how to spot them in gold ? Regards,

If i knew them I'd be retired from trading already! I'm learning them (and they change over time) the hard way - enter; get stopped-out; watch price go my direction... clean wok, refry...

A typical fake out just happened a few minutes ago, when i (and most traders, i guess) was anticipating a break below 1316. PA hinted, postured, dropped, posed... all the time looking exactly like it was going to thunder down... only to stall and effortlessly slide uphill, take out the stops and now everyone is wondering and checking their charts for what just happened. right?

We want to be in on the move early so we make ourselves vulnerable to being stopped out. If it's a true runner there will be plenty small retracements to enter on the way and make a decent profit - without riding the move from it's initial breakout to it's conclusion. The beginning and the end of a move are the trick areas which I'm learning to avoid.

Here's a chart (from recent history but not up-to-date) featuring some ending examples (circled) - the move looks to be over, the indicators have diverged, people enter in the opposite direction and the Market Maker takes what is due to the Market Maker before the actual low and reversal occur:

http://ubuntuone.com/7VB0PjSFjhHY6K2kgaT0IA
cryptocurrency everytime
  • #26,294
  • Oct 9, 2013 4:00am Oct 9, 2013 4:00am
Quoting venzen
{quote} If i knew them I'd be retired from trading already! I'm learning them (and they change over time) the hard way - enter; get stopped-out; watch price go my direction... clean wok, refry... A typical fake out just happened a few minutes ago, when i (and most traders, i guess) was anticipating a break below 1316. PA hinted, postured, dropped, posed... all the time looking exactly like it was going to thunder down... only to stall and effortlessly slide uphill, take out the stops and now everyone is wondering and checking their charts for what...
Quoting okanemici
I assure you guys that this move up is still a well played fake as usual in gold. 1334 sell limit or 1316 sell stop is still intact.
Yes you are right.Yesterdays up move was fake, I was sure about it and posted.I also expected it to go below 1316 but it didnt. Today my bias for gold is changed.Yesterday I was thinking about # 1 move , today I see that # 2 move is also possible.We will only have to wait and see.Since this guys like to fake # 1 option is still a high possiblity with the FOMC minutes today.I think tomorrow we will see the true market direction.
Thank you for your explanation.
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  • #26,295
  • Oct 9, 2013 4:07am Oct 9, 2013 4:07am
Quoting limprobable
{quote} That's what my graph say... but it could go down from now and not reach 1335/37. Could go back to 1280 and 1220 in extension.
Sell at 1327 yesterday. 1310 right now. Put my SL at 1320. No SP now, graph will tell me.
Bottomless wonders spring from simple rules, which are repeated without end
  • #26,296
  • Oct 9, 2013 4:08am Oct 9, 2013 4:08am
Quoting venzen
{quote} If i knew them I'd be retired from trading already! I'm learning them (and they change over time) the hard way - enter; get stopped-out; watch price go my direction... clean wok, refry... A typical fake out just happened a few minutes ago, when i (and most traders, i guess) was anticipating a break below 1316. PA hinted, postured, dropped, posed... all the time looking exactly like it was going to thunder down... only to stall and effortlessly slide uphill, take out the stops and now everyone is wondering and checking their charts for what...

Move below 1316 happened as we typed This looks like # 1 move is going to happen. 1295 area looks like a good place to look for longs or 1318 buy stop will be a safer move.
  • #26,297
  • Oct 9, 2013 4:13am Oct 9, 2013 4:13am
Quoting okanemici
I assure you guys that this move up is still a well played fake as usual in gold. 1334 sell limit or 1316 sell stop is still intact.
Told ya !
  • #26,298
  • Oct 9, 2013 4:40am Oct 9, 2013 4:40am
Quoting okanemici
{quote} Told ya !
what is your target?
Bottomless wonders spring from simple rules, which are repeated without end
  • #26,299
  • Oct 9, 2013 4:51am Oct 9, 2013 4:51am
Gold doesn't protect against inflation - anymore.

Topped in 1980, sliced to 1/3 its value two years later, then went sideways to down for 25 YEARS!

Some protection.

Maybe it might again someday. I wouldn't bet on it till it does.
  • #26,300
  • Oct 9, 2013 5:24am Oct 9, 2013 5:24am
Quoting SunTrader
Gold doesn't protect against inflation - anymore. Topped in 1980, sliced to 1/3 its value two years later, then went sideways to down for 25 YEARS! Some protection. Maybe it might again someday. I wouldn't bet on it till it does.

hehehe... we'll have to wait for inflation to rear its head again sometime in the next 20 years to find out!
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