Hello Eva:
This also goes to Cush, Shaw and Shack:
Peter keeps telling me that I ought to post more, so here goes. It is late so if we talk about gold, Cush bear with us if we get off topic about the three rules for this thread. Eva don't convince yourself that this is the Gold bull market that all gold bugs have been waiting for. I hope it is, because it can be volitile and straight up, but if you get hung up, then you won't recognize the signs that it is coming down. How many held Bre-X all the way down? There was always someone who said at $125 that it was down 50% so it must be cheap and go back up.
canada.bigcharts.com
This chart of the TSE Gold and Precious Metals index for 10 years shows some interesting things. First the absolute low of late last year. Nowhere to go but up? Perhaps and it looks good, but this is a highly manipulated market and you must be prepared if it turns south. As the original gold bug James Dines says, Look don't think, and also be disciplined in your trading. The second thing you should notice and may know about gold stocks, is their cyclical nature. Notice that whether the trend was up as in the first five years or down in the last five, every spring and most summers there have been rallies. Don't get caught if this rally is shortlived although I hope that it looks like all of 93, and its the upward movement in 95 to 96 that most people talk about.
You may know Peter (Svenlar) as you've posted a little more than he, but he lurked a lot at first and I'm just a newbie. He's a trader. I hope that's obvious to all and that I'm not telling tales out of school, Peter and if so I apologize right now. He jumped into the market a few years back, partly because of SI and instantly became a trader and has been quite successful. Beats himself up about bad trades and bad discipline. (We all should at times, but you've got to let it go!) Myself, I started investing too long ago to tell, (Heads up Peter don't tell), but on a computer with a direct line to my broker for eight years now. I'm a gold bug for some of the same reasons as you and if there was a better standard I hope I could be open minded enought to accept it, but it sure shouldn't be the US$!!My trading style is this: Last week I bought ten gold mining stocks, senior producersPDG, TVX, junior producers, GSC, ECO, developmentals (i.e.)found it, sold it and found more, JV'd with producers etc. AZX, CTQ, Silver PAA, Royalty Play FN, and two that I can describe only as belonging to the producer group but are now in the exploration only category of which I may rotate to in the coming weeks, K, and GSC are producers whose price is so low that for the time being they are explorers. I was out of the market so just bought in, some at market, some between bid and ask, but might have played the breakout and I didn't want to miss the ride. Past history with some of these and other reason's for not taking ABX, BGO, MR, and NSU. For me 10 is too many, would like to weed it down to 7.
I need to be ready to change em up and those would be some suitable replacements. When the orders were all filled, I set 10 stops. Looked at the charts of all, and major support at 20% to 12% in some and set stops accordingly. I'm willing to loose 20% of 20% or 4% if the first stop is hit. One went down 17% and you've got to ask yourself, is that enough sell and cut or the opposite especially if it's a favorite and lower your stop. Held firm, went back up and still have not weeded down to that arithmetically outstanding prime number of 7. I will trail these stops up idividually when new support shows, usually once then the second time to break even (always higher than your entry price, must include extra time and commissions (some would automatically add taxes)). If I take that 4% loss on the first stop, then I look at the sector as a whole, and how the rest are doing before deciding to raise my stops drastically and then being stopped out of the sector. I can't sell, so I'm not a trader like Peter, just a wannabe. Break even always rises as time marches on, so your stop must keep rising. You have to decide whether to play it looseey goossey with your stop if you're in the money, and when you think things have gone too far or are going to go too far, then you tighten that stop. It's not personal towards that company, so if you're stopped out, go short, or in an RSP account, set a buy stop for a breakout above the last high and start all over again. When the sectors done if you are a true gold bug, hit the bricks for perhaps five years with a little fix semi annually. Or I could learn to sell and trade. |
