Marc Walton on April 21, 2013
Hi,
I mentioned in Wednesdays update that I would explain more on the
subject of why I continue to buy gold and especially silver and why I
see the recent sell off as a further buying opportunity rather than a
worry. I first dabbled in gold back in 2003 when I was a member of a
small mentor group run by an experienced precious metals dealer, George.
He explained why technically, fundamentally and historically gold
should eventually hit $1000 an ounce and more.I thought he was mad
but a lot of what he said made sense so I stuck the proverbial toe in
the water and invested a few $1000 whilst the price was around $400 an
ounce. Price went absolutely nowhere for over a year and at the time my
money would have made more in the bank.Eventually price made a laboured run up before finally hitting over $700. I was strongly tempted to sell, but George repeated his $1000 an ounce claim and I hung on. Over the next few months it pulled back by over 20% and I was not impressed, but I bought more and continued to do so on a monthly basis. This was my introduction to the thought process of a seasoned investor. If you have done your research and nothing has changed then hang on in there. Fundamentally recent $USA strength versus gold weakness makes no sense at all to me, therefore I continue to buy both on the way up and the way down.
I could of course hedge using forex or try catch tops and bottoms for buying and selling, but that was never my plan. I have posted an article below this one where I explain why I continue to believe that gold and especially silver are far better than paper money and why eventually I believe both will soar in value, you can find that article here: A Brief History Of Gold & Why I Continue to Buy There are also a group of articles in the forum you can catch here which give more information on where, how, when & why I buy: Gold & Silver Forum
Here is a quotation from Paul Tustain, CEO of bullionvault.com whose personal holding is currently -14% ”
The significant majority of the tiny number who eventually succeed in holding onto their wealth through a failure of their currency will be those who acted as the storm gathered and bought gold. By the end they will have been through the mill, having endured countless hours of anguished doubt. But when the market tests them, with temporary movements against them, they will be resolute, provided of course they have the fundamental confidence in their own judgement of the process of their national economic unravelling. This is what it takes to be a successful investor through the failure of a money system.
Forex Week Ahead
Last Thursday and Friday the G20 gathered in Washington. The weekend has seen IMF meetings, The Gbp economy being downgraded, Italian politicians playing games and therefore there is a reasonable chance for some gaps at the market open. If you are new here is how I trade gaps: Marc’s Gap Trading Strategy
If there are no gaps I will wait until after the London open before placing trades. I want to see how traders react to all the news. I continue to prefer trading from daily and weekly analysis as current markets are horribly choppy on many pairs and therefore difficult to predict with any certainty.
Euro/$: Very messy. I prefer the Chf again this week. Longer term charts I am interested to short if price gets up to 1.3300. Intra day watch 4 hour charts and 1.300 for possible longs or shorts. To short below 1.3000 I need a candle to close below followed by a pull back. If I get the entry then I will move my stop to entry after 20 pips as this could be a very limited move. but I am not overly confident and feel there are better opportunities elsewhere.
Gbp/$: Only interested to short. Hopefully my advice to not consider longs unless price broke and closed above 1.5400 kept you out of a loser last week. I explained on Wednesday that I felt that the Gbp was due a fall and that news was most likely to be the catalyst and a few hours after my post it did just that! If price pulls back to 1.5330 again I will short. If price simply drops at the open then I will look for a break and close below 1.5200 for an M2 break out pull back short.
Euro/Gbp: Last weeks short at 0.8600 worked to the pip on a 4 hour chart. I explained in Wednesdays post why I had moved my stop to entry and a few hours later the Gbp killed the trade, but by moving the stop I didn’t lose any money. This pair is almost in a summer like range at the moment bouncing up from 0.8500 and down from 0.8600. Intra day these are the areas to watch on 4 hour charts. This is a good example of the need to be flexible.
However I prefer a short at 0.8700 and I will be interested to short if get a break and close below 0.8490 followed by a pull back.
Chf: Prefer over the Euro again this week as technically more reasons to support my trade plan. Only interested to short worked perfectly last week “0.9325 is my preferred entry.” It now looks a little more bullish and therefore my forward order/weekly trade will be a short at 0.9500. Intra day I will watch 0.9400 on a 4 hour chart.
Aud:Now 300 pips in profit from the 1.0570 short from a couple of weeks ago. I said last weekend “ If it (gold) tanks then the Aud will likely follow.” Gold did and the Aud followed it steeply down. I will only place a forward order to short at 1.0570 (seems unlikely right now). Intra day its a lot messier but I am interested to add to my short if it pulls back to 1.0350 as explained in detail in the video. If it simply keeps dropping then 1.0200 again becomes the key area. I will watch on a 4 hour chart for a 4 hour (half stake) bounce back up OR if price breaks and closes below 1.0180 on a DAILY chart I will look for an M2 pull back short.
Yens: Sharp pull back last week that spiked through my entry areas. This is why I tell you only take 1 Yen trade at a time. This week I prefer the $/Yen
Aud/Yen: Nasty spike last week, watch 100.00 for a bounce but I prefer the $/Yen
Euro/Yen: Same as Above. 127.00 is the zone, but broke first time last week
$/Yen: I am only interested to long, with the trend but still prefer a pullback. My main area to long is 96.50, but if price breaks and closes above 100.00 I will long if we get a pull back. This could be the start of a very big move up, I can remember trading this pair when price was over 1.20!! not too many years ago and the Japanese Government have said they will weaken their currency to promote growth so its a no brainer for me, the important part is catching an entry.
Cad: Still messy but 1.0030 is my preferred entry once more. Its the psych level/parity. Strong previous support & resistance. 61.8% fib and the weekly 55ema – did someone mention multiple reasons! Intra day I will leave alone its simply too silly at the moment
New members please note: If I am looking to take a trade long, at for example 1.6000 , I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself. For more up to the minute updates do not forget to drop by the forum
Pierre, Vassilis (Capsmart), Raa, Omar, Mary, and other experienced members will be available in the forum to give you a more up to the minute assessment & whether they see any potential trades lining up in the next few days. Many members tell me this is the best forex forum there is (no back biting & bitchiness, nor spam, that spoils most forums) and all members are happy to help new visitors. Its a great resource, USE IT: Forex Forum
To view the video, click on the link http://www.youtube.com/watch?v=3vE3iBtmlX0