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Job well done, now its time to decide

Job well done, now its time to decide

by ScottJanuary 14, 2011

The silver trade I outlined in the 2500 word mega post a little while ago is working sweetly.

Now its at an inflection point, where all our biases are going to try and take our profit away.

If you took this trade you now have over 2R of unrealized profits. The last thing you want is for that to disappear. BUT it could be a genuine change of trend. And we have a potential buy signal. Its a hammer at 50 EMA support and lower bollinger. If its going to short squeeze, it will happen here.

If you are short its not unreasonable to bank some or all of the profit here and enjoy a job well done. Or alternatively, tighten up the stops to 360 min or 240 min charts.

If, however, silver opens on monday and falls through the daily lows, its an entirely different proposition. Its a hold tight for a big move scenario.

[Mole: Subs should also check out my post on gold which ties into this.]

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  • Gold_Gerb

    Firehose indeed
    slow down there sweety.

  • raised_by_wolves

    Here's the link to Scott's mega post for anyone that missed it.

  • raised_by_wolves

    Hey Scott, would you mind updating your trade rules on your site? You only describe retest variation, which I'm intimately familiar with. You're missing retest, fake out, inside period, inside period fake out, and gap open.

  • raised_by_wolves

    Since I've been trading silver (and nothing else) the past couple weeks, I can't wait for Monday to find out whether there's a buy signal or not. If the buy signal does happen, I'll be curious to see if valor's ratio chart retests its red trend line.

  • amokta

    My brain is going into neural overload with so many posts 🙂
    Great set of information, will take a while to digest

  • molecool

    You guys complain too much – can anyone absorb more than three pages these days? I used to read a book a day as a kid…

  • volar

    So CS called me Voltar and you call me Valor..

    its VOLAR u bastards (kyle from soutpark's voice)

    Volar is “to fly” in Spanish. From Taleb's first book “Dynamic Hedging” referring to Vega and a pit trader..

    good long ass read i might add

    anyways i covered my short when she did not break support and that chart is starting to get interesting i think

  • Gold_Gerb

    don't trade silver too much, it will turn you blue

  • Gold_Gerb

    try these, apparently they helped Mole.
    (GG ducks)

  • raised_by_wolves

    “Voltar” is fitting for Evil Speculator because “Voltar” is the main character in The League of Super Evil. And, of course, “Valor” means great courage in the face of danger, especially in battle. So, at least our bastardizations of your name were compliments, Valor, er Volar. 🙂

  • raised_by_wolves

    I mostly covered.

    I have some things to work on this weekend. I have a ratio in TOS Charts and another one in TOS Prophet that I'm using in new strength/weakness method. The ratios are similar but not exactly the same. The TOS Charts ratio multiplies the components instead of adding equal values and includes some currencies that the other does not. Today is the first time since using them that these ratios have given differing signals.

    If I were just following the TOS charts one only . . .

    . . . there would be no cover signal with the ratio being down and silver being down even more today.

    If I were following the other one . . .

    . . . I would have a cover signal because the ratio is up.

    The idea is to trade the direction of the line, going long the strongest component when the line is up or going short the weakest component when the line is down.

  • raised_by_wolves

    Apparently, Gerbils have balls but no brains.