Posted on 26 August 2010 with 1 comment from readers
August is usually a quiet month in the precious metals market but this month is different. Silver has started behaving 100 per cent like a precious metal and not as an industrial commodity, and while stocks and Dr Copper have been falling, silver has been outperforming gold which is also on the up.
What is going on here? This is actually fully consistent with the bullion market rumors about the bank cartel unwinding its silver futures positions in the quietest month of the year.
You would expect gold to be falling a little with stocks under pressure. It is not. And you would expect silver to be selling off even more strongly because it is an industrial commodity as well as a precious metal. But it is not.
The stop loss has to be kept below the level if you are long and above the resistance level if you are short on the trade. The method is also useful to trail your stop loss. This is done to protect your profits. Once the stock starts to move in your direction and makes a new support or resistance level then you can now trail the stop loss to that new level.
Moving average on Qprofit System is another popular way to place stops on your trades. This is a technical indicator which can be used to determine the stop loss. A long term moving average is generally used. The stop loss is placed below the moving average line. The method also finds use in trailing your top loss.
These are some of the logical ways to keep stop losses. You however need to try them out and do some hit and trail to know what method best suits you.
Apart from keeping stop losses the other major trouble that the new trades face is to not overtrade in the market.
Does that mean that the gold price is being set up for a serious spike, and that silver will not only follow but outperform in these fireworks? Without the ability to look under the hood of the silver market – and the suspicion is that the market supply is nothing like what the market supposes – we are still in the dark.
But spot the price breakout. Silver is above $19 this morning. Gold is closing on $1,250. If this trend continues then $1,650 gold by next February could well be accompanied by $30 silver.