Could it really be this simple???
Posted by MC on Oct 24, 2008
In a bear trend…
Sell high, cover low
OR if you must
Sell low, cover lower.
Ideally short a bear rally to major resistance with a stop at just above that resistance cluster.
OR
Short a breakdown of major support with a stop at just above that support cluster.
In a bull trend…
Buy low, sell high
OR if you must
Buy high, sell higher.
Ideally buy a correction to major support with a stop at just below that support cluster.
OR
Buy a breakout of major resistance with a stop at just below that resistance cluster.
It really is that simple chart wise. We as humans muck it up with getting fancy, looking at the noisy timeframes and trying to out think the market and/or looking for a single level rather than a cluster. If you’re looking for magical levels and there are none. Trade the market structure and you’ll have a clear path as to where your trades should unfold. This technique will also give you the knowledge of risk/reward ratios before you ever risk a dollar of your cash. As for if the clusters work or not…that’s up to the market. 
Other thoughts…
Trade with the broad trend to up your odds of a profitable trade.
Keep in mind the S&R clusters given this volatility cover massive ground. This is why I’m cash and not trading futures, I cannot afford a proper stop in this environment. Be smart enough to know what your limitations are both mentally and financially!
Good luck
Gold, not all that shiny anymore is it?
Posted by MC on Apr 13, 2008
Gold, not all that shiny anymore is it?
We got the blow off top as the first sign of weakness. Now we had sizable volume come in at the resistance of the downtrend and moving average cluster.
Target one would be the structure support line, target two would be the base of the down channel. Pretty tight stop on this guy at probably $963, well worth the risk for the potential downside IMO.
