Pailin's Trading Corner

Volatility in gold price (including liquidity type events) seem to really juice up the time-of-day gold trade.  That was kind of the point of my post about gold buying.

Gold buying --> pressure on bankers --> manipulation to contain price --> volatility --> more profit.

My guess is that this is true for both strategies.

Without having each others P&L in front of us, or maybe a set of algorithms to back test and compare the strategies, it is difficult to evaluate one system versus the other.

I definitely want to learn your system, but I'm too focused right now on the time-of-day trade.  (Dropping all other methods of trading was a crucial part of me learning how to correctly trade the time-of-day system, so I'm not going to change that just yet.)  But I'm sure I will get a different and better understanding of market action once I learn to make money using your system.  I hope I'll get the chance in a month or two.

As far as the time frame, I've read a 2001 article written by Dimitri Speck about the time-of-day cycle in gold.  This article dates the daily gold cycle back to 1993.  So the cycle has been with us nearly 20 years!!!

I don't know how long it will continue.  But I would guess it will continue until we are in a true mania.  It is my hope that this is several years away, at least.  I don't think any of us are going to be trading online at that time, anyway.

So, like price volatility, I guess the daily cycle in gold is not going to go away any time soon.

2010 and 2011 were banner years for the time-of-day trade.  If Jan-Apr is any indication, 2012 will be so as well.

But you cannot really compare systems without some form of back testing.

For example, one advantage of the time-of-day is that it lends itself well to the use of leverage.  Depending on how you do it, you never have to have more than a single position open at a time.  (Of course you have to manage money and risk, just like with the pivots.)

I'm really looking forward to playing around with your system.  I can't wait to figure out how to setup spreadsheets to back test and study it!  But before that I'll need to play around with it using real money to understand it.

Pailin - a question for you.  You mentioned that if silver was to hit S3 even several days in a row, you would continue buying.  Thus far, since you have been doing this, what is the greatest number of buys you had to make (combining all sequential S1, S2, S3, S1, S2, S3, etc...) in a row before price hit a R1 level?  Trying to get a feel for how to apportion the tranches (and how many to plan for).  What is your biggest % loss on a trade thus far? Have you ditched a S3 buy at R1 just because you didnt feel right about the market?  I appreciate your insights and willingness to share freely.  I like the simplicity of it.  No more charting necessary.  Manipulative price smackdowns are appreciated and welcomed.  5-10 minutes per day of effort. 

I havent tried it yet, but, I am liking the concept more and more.  I am really curious as to whether it would work in reverse - i.e. shorting at R1, R2, R3, etc...and closing out the shorts at support.  Perhaps your existing system works best when silver is in a downtrend whereas the reverse would work better in an uptrend.  I have no idea - just thinking out loud.

Tomorrow is Tuesday and the first of the month.  Should be a strong day tomorrow, though I suspect a late morning development for the miners.  This has been a typical pattern for Tuesdays.  ISM Manufacturing for tomorrow will probably support prices in commodities.

http://seekingalpha.com/article/540961-gold-and-silver-weekly-outlook-fo...

With weekly events affecting the market.

It's all good.

It's true that there was a shift in the optimum times from 5am-10am to 2:30am-8/9am that took place around New Year's.  The trade was still profitable, but it became clear in January that a shift in times resulted in better profits.  This new time has been very consistent over the last 4 months.  Looking back and studying past years, this same shift has happened before -- I'm not sure of the purpose or the cause.  I keep my eye on this every week.

The trade has not required babysitting to return good profits, though profits can be optimized by doing so. In particular, stepping aside during the Fed-induced crashes improved my April profits from OK to very good.  At the beginning, I had to really force myself to go strictly by the times in order to start making money with the system -- that was hard.   Once I got the hang of it I was able to make good adjustments.

I used to trade silver almost exclusively, but it does not lend itself as well to the time-of-day trade.  It is definitely possible, but Gold is much more regular, which is good for the trade.  (This seems to be the opposite for your pivot system.)

I DO babysit my trade during the transition times to try to improve profits.  Often this will improve it one day and make it worse the next.  But overall I can improve my profits in this way.  This part is a LOT of work, and probably not worth it.  I don't really sleep well, so I envy you on that point.  But I think that is really just my approach to trading.  It is not necessary for profits.

I'm going to PM you something.  Surely I've posted enough today!

Here is data for forex one minute quotes from 1/1/2011 until about a month or two ago for major currency pairs and XAG and XAU, 7,921,255 rows.  Use it for testing pivots or whatever you want, just post results here.

http://www.4shared.com/zip/v9KJtueW/DBInsertedData.html

Of course I agree with Rico. What was so unusual about price in GC and SI today? Nothing at all. This happens 3 friggin times a week. It is not only intended to suppress price but also to keep people out of the Comex. Period.

Just imagine if AAPL moved the same way due to blatant racketeering. One morning early and in thin traffic it would crash 25 pts for no reason, then rally, then just as it begins to look bullish, crash again. People would abandon the stock. It would become 'too volatile', stay away, etc.

Tuesday, high volatility. Gold could well breakout tomorrow and GDXJ as well. If the Market opens down and dismal its a buy for Granny since Tuesday often just reverses momentum as the Borg flushes out players low only to switch long. If Market in metal opens high it could be a keeper and a gap and run situation. Its time.

Now what the fuck is Alf Fields who is widely read by his enemies calling out the bottom for? Its called stamping a bulls eye on your forehead and pulling your pants down. These criminals cover the waterfront. They read everything, doesn't he know a goddamn thing about counter-intelligence?  Look what they did to his blatant 1650 line in the sand call. Of course they crashed thru that, what is the matter with these bird brains? What century is he living in? We are hand to hand with the Borg and its Mother Death Star and we do not need anyone in the rebel army naming GPS coordinates of our position. Enough said. Time to go to War.

Sry if this has been beaten to death...

This is spot gold's 8th attempt to break through the daily chart trendline from the Sep 6 2011 high. Broke thru Feb 21 in Access market buying, which to me was suspicious, leading to Feb 29 smash-down...leading into the Feb 29 smash-down gold was resting under the 78.6% Fib Fan line (from Sep 6 to Dec 29) for two days and as I write it is resting on the upper side of the trendline which has been confirmed 14 times...is this a record?

Anyway, am long. 

Thanks Pailin.  No stops - right?  In the event of a repeat of 2/29/2012 you would be prepared to take those losses?  Would it make sense to also buy some OTM short term puts to hedge against the black swan/death star/borg?  Trying to figure out how to allow for the "unusual" 4-5 standard deviation move to the downside that we all know silver is capable of at a moments notice.  It may not happen often - but, when it does...