What a massacre for gold today! Gold was trading above $1,220 last night and got smashed back down to the $1,205 level. This has been disastrous for many people as I saw on forums and stock twits.
Many US economic indicators were in the red, including a really worst than expected -1.1% in construction spending m/m. China interest rates cut was also in favor of gold. But what happened cant be changed and should not be over justified. Gold simply plummeted.
NUGT was up pre-market, which was a confirmation for me, at that time, that my weekend analysis was accurate. NUGT was trading in between $16.00-$16.10 around 8:30 this morning, and so I jumped in at $16.08. I had stuff to do so I figured out I would come back in about an hour to set my stop loss at $15.50-$15.55. Congratulations to my readers who got out at that point! I know some of you did, and some of you didn't.
Well that didn't go according to plan for me. When I came back I saw NUGT in the low $15s, which was around a 7% loss. I hate being caught in those situations. They key however is to not panic, because it is already too late. Yes this could become a costly mistake. But at the same time it is an opportunity for me to explain some additional concepts here.
There is basically 3 choices in those situations:
1. Sell and take the loss
2. Average down if it continues to go down
3. Wait until it goes back up to either turn a profit or diminish the loss
(4.) You could also hedge your position
I still trust my analysis, and so I have decided to go with 3 until tomorrow. However, if NUGT hits $14.00 I will be out for a 15% loss. This is huge, and it's the first time I will post such a big loss if it happens.
That being said, I'm not nervous because I'm a consistent profitable trader/investor, and I think remaining calm and logical is key.
Have you already went through a loss like that?
So as I think I mentioned before I use technical analysis to chose my buy and sell points. For the most part they are extremely accurate. 19/19 trades correct in December, 18/19 correct in November, but January 2nd I got caught in an ugly trade with JDST that I ultimately lost 60% of my portfolio. Now I have completely revamped my trading plan. I will say that I think you are in a good spot with NUGT. I almost bought in today after I closed my DUST position. I will reassess in the am but I may be right beside you.
ReplyDeleteThat are some impressive results. Im confident Im in a good spot too, but it might take a couple of days before I can get out. Let me know if you jump in this morning. I will send you an email regarding your analysis.
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