I posted the chart below in the MP Alumni forum last week.
I did so for the same reason someone drops a stone in a pond – they want to see where the ripples go. Often the issue with trading or investing is a closed mind or a mind that is set on a particular course. This comes back to the notion of the fixed narrative that I have mentioned many times before. As I said in the post that accompanied this image. If I were to define what being a trader was it would be the recognition of opportunities as they present themselves and to take advantages of those opportunities in a manner that offers the potential for profit whilst managing risk. Most situations present you with some form of opportunity, sometimes that opportunity is blindingly obvious and other times it is the opportunity to sit and wait. To take no action is an action.
With respect to this chart I see several things that may prompt me to take action in the future. For example, if gold were to drop below the 1270 mark I would consider going short. My view is that the bottom of the channel at around 1180 is wide enough for this to profitable if it followed through. Conversely, if gold moved back up I would consider going long.
The central issue here is to be aware of opportunities as they unfold – too many traders sit and stare at the screen waiting for the market to actually tell them what to do. I am certain some traders sit there and wish the market would also take the trade for them so they didnt have to think. more importantly, so they didnt have to take a risk.