Quote from Ghost of Cutten:
Ok. What was your initial rationale for shorting? You expected a quick drop with no meaningful delay or minor tests of your position? Or longer-term bearish outlook?
I am just curious what trade rationale there was for shorting at recent levels that was subsequently invalidated just by the market ranging around a bit for a week or so. IMO if gold was a short in the high 1400s recently then it was a short at the same prices a week later. It's not like there was some clear news or catalyst that should have caused a move back down in 2-3 days. If the recent rally was a bear market pullback then a bit of ranging around is normal, no?
I could understand covering if gold blew above 1500 on super bullish news etc, but if anything it confirmed your shorts by going a few dollars above the initial highs then reversing notably the same day.
To answer this, I probably should clarify that I took this position for 2 reasons: 1st was RM's call alone, 2nd was the structure of the setup. I had already went in blind on his first call because the setup was easier to take risk on, and cashed once it tanked.
After such a volatile move got the attention of the entire market, what I look for changes. Before it was gut feel exit on lighter size, now it's a measured continuation with tighter exit conditions.
Keep in mind I come from prop, where moves like this intraday were my basic fare day-in-day-out, until the algorithmic guys turned it all to chop. Since then I had to craft my own with a range of tools that no longer model one instrument alone, and also operate over weeks. BUT, when you get a rare berserk crash like this, some of the irrational cleanness of those old setups comes back, the relative tightness of price and volume actually means something.
When you say gold's a short below 1400 regardless of your entry, I never think that way. I want to take larger size with either a defined risk exit, or a time exit, rather than a macro position. The longer it takes for everyone to watch and take sides, the more I start looking for a reason to go, and go back to my normal stuff. These moves are so rare and no longer part of my quiver.
That said, still in, and it's starting to behave as desired, but the longer things go sideways the more binary criteria I add to close.
