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Trading Gold: Could you be the magic to save me?

Discussion in 'Shares' started by wdongli, 18th Jul, 2011.

  1. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    There are black swans in the market, bad or good. When they appear most of market warriors would be shocked into bipolar disorder.

    The surprise from the black swans would generate great momentum since the initial force and the speed to change in market sentiment. Once the momentum is formed, no one could predict how the market would react.

    OK, gold breaks though $1,600 today. Could it make the sensational effects in my life? Don't know but if it happens I would not be surprised. History play this kind of drama times by times. Somebodies said something like the butterfly wing flipping in China or US could result in storm in Australia market! I believe it but never try to predict it.

    A serious of mistakes to sense the market sentiment have destroyed all of my margin of safety if I was forced to sell on fire. Could we see dot.gold phenomena? The market warriors as a whole curse the Ultimate Bubble, which is irrational. It is a natural phenomena in the market. The question is where your position is.

    I have figure out how to restructure my corner in August. If the euphoria comes in for gold, I would be quite happy since I have hide in its way for 4 years even I have to rebalance and swamp what I hold!

    Could RAU and ARX follow IAU's heel to shoot up? Just wonder and refuse to say they have to! The world is huge, one place is dark, and another place is sunny. Sometimes City of Perth has heavy raining but no single water drop from the sky around my home! Very strange!

    Hope gold shoots up to $5,000 in a second and gold blesses me! Crazy, eh? In despair, wish could be used as hope and I am very flexible for the market to bent me in any form!
     
    Last edited by a moderator: 18th Jul, 2011
  2. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    When the time wish overwhelms the hope...

    I never buy anything which drive me and others being wishful since I worry too much based on my experiences of the mass euphoria nationally

    But I do wish as anyone else in the market and every time when I wished for some magic, I lost the surveillance about the dismal consequences from the unavoidable crash and then refused to collect the chips from table.

    Is it gold in Ultimate Bubble? Could the nations around the world be default fundamentally and technically one after another? I don't hope it will be true and feel it is unlikely for this kind of default to be real since no one could sustain the pains with that. However delusion and illusion could stir the nerves of herd by some unexpected event or rumor.

    So logical questions should be raised by the intelligent market players based on their own position and the possible bipolar consequences.

    1. What profit or loss would be if gold is forming the ultimate bubble you would expect for yourself?

    2. Is the loss affordable? Is the profit a killing? What is enough for you? Do you feel the looming risk to lose all you have got?

    3. Wish is amazing if we don't use it to guide our judgment and decision. So are you doing based on the wish only or the counting of the losses and profit and get the sensible rationality to take the risks or refuse the risks by collecting the chips from the table.

    4. Risk in the market is the losses of paper profit and capital which make you feel painful. Killing usually happens with the looming risk you lose all if the killings are the result of herd euphoria.

    5. Are the warriors don't mind what price is any more? Are there some new age theory spread in the market as virus? Are you in no loss position if the crash becomes true?

    It is best time to buy value when the toughest bargain hunters like me feel despair which could be felt around the trading forum. It is time to consider to sell when you feel the ultimate bubble in the way but don't rush. If you could get rational analysis and judgment and your cost is extremely low, you should be tough to hold.

    We should buy for margin of safety. We should have cash reserves for the time when market is in depression longer than anyone's expectation. We should hold when market is optimism but not euphoria and when our reasonable profit target has not been reached. We should sell if our profit target in hand and leave the killing in next round with 100% sure we would not pay the profit back!

    So wish gold moves up and up is not sin but if we don't have the logic analysis, self rational judgment, discipline to lock the profit for our expenses and overlay, flexible but effective organization for our profit goal, we would fail!
     
  3. wdongli

    wdongli Well-Known Member

    Joined:
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    Posts:
    1,292
    Location:
    Perth
    When gold burn itself down or shoot itself into the sky?

    All of business should be run to get the chances for adding its value safely.

    As traders or investors, what're your direct hopes and indirect hopes in this market context? Have you question yourself whether or not it is enough for your goal of the direct and indirect hopes in the case you have got what you want at reasonable price? Could the profit is good enough to make you happy enough for your bottom line objectives? Do you know what your bottom line objectives? Could you improve the bottom line result in financial terms and context? Do you think what you thought and procedures to make judgment and decision are those a businesslike people should do in the market?

    Gold moves up in the context when people worry about the possible economy slow down and perhaps the high inflation. Gold would not go up in straight line but up/down with the news or market sentiment or expectation. When we want to get a position or hold a position in the market we tend to exaggerate something to support our own feeling. $1600 is a dramatic price if your gold was got at $300. Gold have been up for about a decade but it has little effects on the gold wishful dirty cheap fishes.

    Seriously until today I tend to ignore this fact since I wish some day the gold ultimate bubbles would bring all of my golden fishes into the sky. I still believe that the ultimate bubble would make the golden fishes shine but I have to question such as under what conditions could they shine?; what is the probability for this shining?; how long should I wait for this shine?; Is it worthwhile for the waiting economically?; what the effects for my bottom line objectives?; Could I survive for the waiting?

    Since 2004, I mainly focus to buy the dirty-cheap fishes at their lowest price. The very promising results before October 2010 are the result largely I was lucky when the market was bullish and GFC crash came in too quick and too hard so that hopes to rebounce was very strong and I was extremely cautious to buy and sell!

    However the context has been changed and I become more and more greedy! I have to say I become ignorant and arrogant. I was defeated by the Ego. If I don't stop this Ego now, it would make me dance to work for failure.

    So back to gold, we need to question ourselves when would gold burn itself down or shoot itself into the sky? Shooting into the sky should be no problems to any one, early birds or late birds or people stand in sideline, but the sky is more risky than the ground generally saying, so that you have to ask yourself what if it drops down from the sky?

    We all wish we could run away before the dropping happen just as we expected we could leave away after we enjoyed the euphoric music before GFC crash, even most of late birds lost the shirts in the crash? Are the market full of chances and risks? So is it wise to bet on our running speed and feeling only?

    Have to say I wish too much and trust my feeling and running skills too much in my posts before today even they are not completely insane. However wish too much usually is the first step to be insane! We really need some plan to make us behave properly in the market!