Posted on 04 November 2014 with 1 comment from readers
FM trader Brian Kelly dissects the performance of gold over the last year and compares its pattern to that of a ‘vomiting camel’. Combined with other technical indicators this could mean a downward spike in the gold price of the sort not seen since the collapse of 2008. That of course was followed by a tremendous rally in the gold price to the all-time high of $1,923 of 2011.
If you observe the performance of any asset you would be able to find such interesting patterns in most of them. There are some assets that keep growing without any dull moment. There are those that grow in cycles where there are occasional dips followed by massive growth. And finally there are others that are seen working in cycles where there are ups and downs occurring more or less in a similar fashion with the peaks not shifting too high or too low.
The real trick in trading is to identify the right assets. Whether it is stock trading or crypto trading. Of course, there are trading bots designed to help traders without trading knowledge. Visit this page to learn about one such bot. But if you are looking to develop a long term trading strategy then learn to grow beyond the bots without completely ignoring them. You should also learn to perfectly balance and diversify your investments in bots and in autonomous trading. If you are new to trading here are a few things to remember when you pick an asset to invest in-
- Understand the value of the asset rather than the price
- Know the company or the team that is offering the asset as the growth really depends on the growth of the supporting team or firm
- Look for undervalued low cap stocks. These might turn out to be multi-baggers and if you are tight on budget this would be a good opportunity to consider. These are assets that can help you make a large profit over a long duration.
Getting back to our ‘vomiting camel’ chart, when you have a lot of sources talking about such patterns then it is definitely worth taking a look.
This humourous analysis has a serious point though with financial markets as unstable as they have been recently you could just as easily get a price spike in the opposite direction. Such absurd bear arguments are frequently wrong…