I know exactly how you feel. For weeks on end equities gyrate inside a 50 handle channel and suddenly we get a blast off out of nowhere. Annoying. But absolutely unavoidable and I recommend you don’t waste time emotionally chasing a trade which was largely bot driven and may be reversed at a moment’s notice. The Zero chart below shows us minimal participation throughout yesterday’s session and as such the advance should not be trusted. Congrats to you if you managed to trade it higher but it is probably best to not overstay your welcome.
Human psychology is rather puzzling at times – actually make that most of the time. And a cognitive bias that’s probably at play right now among the rest of us is hindsight bias – seeing past events as having been predictable and reasonable to expect before they occurred (Fischhoff/Kahneman 1975). Sure we were trading near the bottom of the channel Wednesday afternoon but unless you are a stone cold swing trader it was best to stay out and focus your attention on easier victims.
Evil Speculator Rule #264: Never worry about the trades you didn’t take. Instead worry about the ones you should have taken.
By the way that rule has been purposely worded and if you do not grasp its full implications then do yourself a favor and ask away in the comment section.
Alright silver may bestow us with a long setup if it manages to drop a little and trigger my limit near 16.9. My stop would be placed below 16.78 and of course you can elect to be even more conservative, especially with this contract. Remember that larger stop ranges reduce your position size – if that just blew your mind then I invite you to play around with your handy futures risk calculator.
Quite a few more setups below the fold – please join me in the lair.
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