Here we go, a new week. What does it have in store for us?
To kick things off, we were kicked out of our GLL trade today.
To the chart, Robin…
You can see from the chart above that the price had a small drop today. Not much, but enough to see us off.
The high attained after the trade was $41.16 at position one. This anchored our trailing stop which was following, dutifully, behind at a respectable distance of $4.23. Therefore when the price crossed the stop price of $36.93, we found ourselves on the sidelines.
$40.47 (original purchase price) – $36.93 = $3.54 X 300 shares = ($1,062) Loss.
Our adjusted portfolio = $ 138,720.10
So, if we have a stop out of the DOWN version of gold. We need to look at the UP side of gold to see if there is anything there for us.
The UGL is the ETF that mimics the rise of gold. If we break down our trade set up we can see that this symbol is in an uptrend per our definition i.e. the blue EMA (21) is above the green EMA (55). Now we look at our triggers: the price and or the 8 exponential moving average (red). The price and the red EMA have crossed the blue EMA. We should be good to go.
Sadly, we can also see that a resistance level is in our way. We do not want to enter a trade to have the price bounce back down from resistance. A trailing stop needs to be placed so that as the price moves and with it the anchored stop, so that our trade can become risk free before the price hits the resistance level.
This cannot happen with UGL. Therefore we will wait until the price has closed above the resistance line. We will then place a stop-buy just above the high of the candle that did the closing.
I think that is all clear, if not, drop me a line at: email@example.com.