Comments on: How to Survive in This Economy http://dailyreckoning.com/how-to-survive-in-this-economy/ Economic News, Markets Commentary, Gold, Oil and Investing Strategies. Sat, 26 May 2012 18:05:48 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: James Orr http://dailyreckoning.com/how-to-survive-in-this-economy/#comment-5131 James Orr Fri, 10 Apr 2009 18:19:46 +0000 http://dailyreckoning.com/?p=14468#comment-5131 I've read Mr. Covel's book, Trend Following. Much of what he's saying here is from the first few chapters of the book! But there is wisdom here. Trend following frees you to trade almost any market, and many successful traders do just that. The spot Gold market may be more volatile than most, but it still has long term trends. If you were a trend follower, for example, you might have purchased Gold back when it was at $300, or $400, or $500 an ounce. It would have been a good trade. And you might be selling it now that it has peaked at around $950 - $1000 and come down (if your system told you that was a valid peak). But, you would have waited until the price was coming down from the peak, to know that the bull run was over. You wouldn't have sold at $700 or $800 on its way up, because the trend was still there. You would wait until its run its course. Of course, the secret in trading this way, is deciding when the larger trend has changed. Many trend followers do this through technical analysis. Even a simple Donchian channel breakout system can be used. But once the system gives a signal, you take it. This type of trading is usually longer term, from weeks to months in some cases. I think in that regard it is different from what most people think of as "trading". I’ve read Mr. Covel’s book, Trend Following. Much of what he’s saying here is from the first few chapters of the book! But there is wisdom here. Trend following frees you to trade almost any market, and many successful traders do just that. The spot Gold market may be more volatile than most, but it still has long term trends. If you were a trend follower, for example, you might have purchased Gold back when it was at $300, or $400, or $500 an ounce. It would have been a good trade. And you might be selling it now that it has peaked at around $950 – $1000 and come down (if your system told you that was a valid peak). But, you would have waited until the price was coming down from the peak, to know that the bull run was over. You wouldn’t have sold at $700 or $800 on its way up, because the trend was still there. You would wait until its run its course.

Of course, the secret in trading this way, is deciding when the larger trend has changed. Many trend followers do this through technical analysis. Even a simple Donchian channel breakout system can be used. But once the system gives a signal, you take it. This type of trading is usually longer term, from weeks to months in some cases. I think in that regard it is different from what most people think of as “trading”.

]]> By: Tom http://dailyreckoning.com/how-to-survive-in-this-economy/#comment-5062 Tom Fri, 10 Apr 2009 10:00:36 +0000 http://dailyreckoning.com/?p=14468#comment-5062 mm... trend following seems like driving looking just in the rearmirror: it does not seem much promising in itself. Take the gold market (the only where I am invested): now many pundits expects short term losses but medium and long term much bigger gains, based both on fundamentals *and* technical analysis, so they tend to advise to stay long whatever happens in the short term (and I agree). Moreover, even if you find a regular cycle in price (seasonal, or even daily/weekly as in gold) you have to consider fees and trasaction costs to trade (1,6% to sell and buy back gold on Bulliovault for ex., so in this case it takes at least a 3-5% move in price to take the risk...) mm… trend following seems like driving looking just in the rearmirror: it does not seem much promising in itself. Take the gold market (the only where I am invested): now many pundits expects short term losses but medium and long term much bigger gains, based both on fundamentals *and* technical analysis, so they tend to advise to stay long whatever happens in the short term (and I agree).

Moreover, even if you find a regular cycle in price (seasonal, or even daily/weekly as in gold) you have to consider fees and trasaction costs to trade (1,6% to sell and buy back gold on Bulliovault for ex., so in this case it takes at least a 3-5% move in price to take the risk…)

]]> By: JMR ManDribble http://dailyreckoning.com/how-to-survive-in-this-economy/#comment-4998 JMR ManDribble Thu, 09 Apr 2009 22:19:19 +0000 http://dailyreckoning.com/?p=14468#comment-4998 And?... And?…

]]>