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Attitude + Gold + Dollar | 4th November 2016

Attitude + Gold + Dollar | 4th November 2016

Gold, Dollar , Euro

First, a Vision to Align and Unite Us

I want you to imagine driving in a storm. You’ve picked the car of your choice, you’ve packed everything you believe you need, and you set off to your destination. However, a storm looms ahead and before you know it you’ve slowed your pace and you can barely see through the windshield as the drops, the size of grapes, pelt down. I’ve been in weather like that. Even with the windshield wipers on, you can barely make out the distance to the vehicle ahead and the lines on the road are completely obscured.

That is what its like to begin trading the stock market. For some the rain  and lack of visibility remains for years, perhaps to the point where they pull over and abandon the vehicle. In other words, they abandon their goals for success in the stock market because it is simply overwhelming. Close the account, withdraw the balance and go save it, working back what had been lost.

So what could have been done differently to avoid the scenario above? I mean, it was always going to storm at that time. The weather is a set of systems within systems and it would always have resulted in a storm at that moment.

So what could have been done differently?

Well, the driver could have checked the weather report. Some read the paper, some use the mobile phones, but an indication of what the weather would be like would have been helpful.

The windshield could also be treated with water repellant solution, to make sure the water slides of instantly, helping to maintain a clear view.

An alternative route could have been planned, in case any unforeseen circumstances arose on that particular road.

A halfway pit stop could have been nominated, to take a breather during the storm. Grab a coffee. Maybe bump into me, have a conversation and when the skies clear up we’d be on our way again.

At some point I’ll go into detail about how this applies to trading, but,  succinctly,  consider the following for your trading:

  1. Are you sure your industry is in a bull trend if you’re trading long? (buying to sell higher later)
  2. Are you educating yourself? Trading and even long term investing is a business. You need knowledge.
  3. Do you have a mentor? Do you have exposure to someone who actually knows the stock market?
  4. Do you have exposure to other traders? (profitable & consistent traders: not punters/gamblers/mates etc)
  5. Do you have a system with goals?

All the above are extremely important for success. Among the most important is having a mentor  and exposure to real traders.  If you’ve never traded before, then believe me, it’s like you’re walking into a predator filled jungle wearing a speedo and bedtime slippers. You’re simply not prepared for what’s about to happen. And if you happen to be profitable, I can almost guarantee it’s simply luck. Luck is not a system. Luck is a coin flip and can never be relied upon for consistent growth in wealth or income.

So give some weight to my thoughts above: if you find that you’re not enjoying your journey, feeling directionless or hopeless, then you’re probably missing a bulk of the above.

You cannot trade in isolation. No trader is an island. It’s only if we’re connected that we can be part of the larger network of knowledge and trend.

I hope that the | Chamber of Merchants | assists you with at least some of the above, by exposing you to thoughts and conversations and that you never would have been exposed to otherwise.

I hope that what we share here is a beacon of light in a market of madness and that it provides a clearer view of where we are in the greater scheme of things.

I hope that what we share here is providing you with an educational experience unlike any other: an education where you can learn to think and fend for yourself in the market and the economy, learning to overcome your own weaknesses so that perhaps in the future you may assist and mentor others on their path to becoming a capable and confident market participant.

Above all, I hope that when you are successful in various aspects of your life whether it be family, career, sports or hobbies,  that you will look upon others with kindness and good will.

That when you find them, like children by the side of the road, covered in dirt and dressed in rags, without a means to be free of their predicament, that you will be the bridge to their success by giving your time and your support.

I trust that such an attitude and approach will extend to all areas of your life and that you won’t wait for some day, but rather commence today in contributing back to those around you in whatever capacity you are able: doing so with no reward or praise in mind, although the reward will certainly be present and real in their success and experience.

Thank you for you support, shares and participation.

You are a Patron of the | Chamber of Merchants |

Now let’s discuss business:

[Disclaimer: I’m not a financial advisor. Your wealth is at risk. Seek professional advice and do your own research. You’re reading the thoughts of a trader that has put his own wealth at risk. Don’t base your trades on this information. This entire site is for educational purposes only and a financial professional should be consulted before making any financial decisions]

 

Be a support to someone else, their success is the reward

Portfolio

My account as of today, 4th November 2016, is -$15k AUD from my October balance which is currently $295k AUD. Follow me on twitter to get  updates  on my portfolio balance as well as real-time commentary on the market as the Merchant sees it. Not all tweets are strictly business, so bear with me as I share spotify tracks and comment on Bloomberg hosts and guests ;p Sometimes, they even comment back.

[Disclaimer: I’m not a financial advisor. Your wealth is at risk. Seek professional advice and do your own research. You’re reading the thoughts of a trader that has put his own wealth at risk. Don’t base your trades on this information. This entire site is for educational purposes only and a financial professional should be consulted before making any financial decisions]

 

Gold+Dollar+Euro

Gold retraced all the way to about $1287. This was a probability mentioned in my previous post

Gold

However, given some movement in the currency market, Gold, as I type this has recovered to $1300 USD. Once again, trying to trade in and out means that you’re very likely to miss the larger move because it’s just not possible to estimate the short term tops and bottoms. It’s not the Merchant way.

Here’s the economic data. A mixed bag, but still not a great time to be considering tightening monetary policy when the economy appears to be struggling under its own weight:

screen-shot-2016-11-03-at-10-21-32-pm

screen-shot-2016-11-03-at-10-21-17-pm

Although some of the numbers were concerning, the positive numbers still gave the market an attempt to rally the U.S Dollar (don’t ask me why… Buy the dump maybe?). Below you can see that the dollar is trying to bounce off the 97.26 mark. If it doesn’t hold (there’s still 3 hours left in U.S trading, then the Dollar can easily make a full throttle dive towards 96.50. This post will be out of date, but I’ll repost if anything is significantly different.

screen-shot-2016-11-04-at-12-27-33-am

The Euro on the other hand took a slight knock around the time the UK judgement was made that Theresa May will need to employ a parliamentary vote before executing article 50. Keep in mind that the Euro had been rallying in the days prior so a pull-back is expected which would create the dead cat bounce support level for the U.S Dollar. The Euro has broken through its resistance so the probability of a continued Euro rally is high in my opinion. Remember,  the U.S Dollar DXY consists of a basket of currencies and the Euro comprises over 50% of the weight. Thereforea move in the Euro = a move in the Dollar = a move in Gold. At the moment, if the Euro moves up, so does gold.

screen-shot-2016-11-04-at-12-28-11-am

The stock market continues to lose its footing as begins to test the previous supports from September:

 

screen-shot-2016-11-04-at-12-29-01-am

 

Conclusion:

Remember, if you’re trading gold then you’re also trading currencies.

Tonight is the final set of USA economic numbers. It will send the trend of the rest of the month.  The markets continue to test supports and the VIX continues to rise:

screen-shot-2016-11-04-at-12-30-54-am

I can’t predict short term price movements, but I am confident that I will be exiting my trades well above the Gold price of $1400+ In the meantime we will experience volatility as the world struggles with the election and looming interest rates from the Fed (low probability).

 

ASX is likely to be negative with gold miners increasing in price.

 

I have patience. Do you?

 

| the Merchant

 

 

 

 

 

 

 

 

[Disclaimer: I’m not a financial advisor. Your wealth is at risk. Seek professional advice and do your own research. You’re reading the thoughts of a trader that has put his own wealth at risk. Don’t base your trades on this information. This entire site is for educational purposes only and a financial professional should be consulted before making any financial decisions]

 

4 Comments

  1. Anonymous

    I like and can identify with the scenario of rain and storms. In the weather of the trade market.
    I can see you are a great story teller and have a great knowledge through all your bad and good experiences in the stock market.
    I can see clearly now the rain has gone.
    Lol have a great weekend. I can’t wait for Monday to read your next post.
    I love it

    Reply
    • the Merchant

      I’m glad you find value in the analogy. ? thank you for your support and interest. Don’t hesitate to shoot me an email if you have any questions for the Q&A

      Reply
  2. Anonymous

    Good Morning merchant!
    When you say your account as of today is 295k and 15k? Does it mean you are15k down . Still?
    It might be a dum question, but just curious to know
    Have a great day

    Reply
    • the Merchant

      Hi. I posted a few weeks ago that a pullback was likely to occur. At that stage my account was 310k. As of this moment I’m at 295k. So still 15k down from that point. I will revise the trades page to reflect the balance in due course. Thanks for the question and the support. ??

      Reply

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