Thursday, May 26, 2011

Weapon of choice

12:28 pm (Hawaii) On the road today and for some odd reason, losing money on those trades isn't bothering me. I exercised caution, cut losses. True, stop-losses would've kept me in better exit points, but that was true only in EXK. There was no way to avoid that steep drop in AGQ. But looking back now, Rip Van Winkle would've fared better than I did.

AGQ is at 194.61 after hours, which is just a few cents lower than my entry point yesterday. Well off the recent high above 201, but still ... I would be OK with it here had I not sold. EXK is at 9.84, finishing pretty strong after that drop to the 9.40 level, where I sold (9.48). Yup, I was one of the fools who got shaken out. Guess that makes me nothing more than a speculator no matter how much I believe in the fundamentals of the silver and gold markets. As for XG, what a punching bag. After that nice run, it's been a dud for days, now at 10.42. I'm glad, in a way, that I got out of that. Then again, this is not a bad level for an entry point. It's just that my entry was at 10.73.

It's a matter of perspective and timing. All the risk management in the world is great for a trader, but it still comes down to choices. Do I choose to micro-manage from minute to minute? Or do I put some trust in the direction of one stock, one sector, one global economy that is clearly in trouble? Even the bears have their conviction and find ways to make money. It's simple for a lot of traders, not so simple for many more. I want simple. Traders who knew silver was topping again at 39 (or close to it) went long ZSL or shorted AGQ. Some of them smartly went long AGQ at 188 or 190 not long after the opening bell. Just like those who sold EXK at 9.90 to 9.93 yesterday, then went long again today below 9.50 — where I sold.

It's about choices, more than any other factor. Being informed helps me make better choices, but it's about as plain as this: buy low, sell high. Anybody with a half-brain and can determine what's low and what's high in any stock, etf or sector and makes the best choices based on that platform will win more than lose.

Might be best to flush out all the activity and give myself a break for the rest of the week. Maybe build up my cash flow situation so I can acquire more physical metal in the next few weeks, strictly for long-term purposes, if the puppet masters take spot prices down again. Not if, but when.

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