When I first started writing for iBankCoin over two years ago, I was as bearish as could be in identifying the now-infamous diamond topping pattern on the major index charts prior to the Flash Crash on May 6, 2010. I stayed cautious for much of the rest of that summer before turning bullish in July, and then proceeded to stay bullish through the rest of the year.
I was originally greeted by perma-bears as being one of their own when I first started blogging, seeing as I harped on the ominous technical signs the market painted on a daily basis leading up to the Flash Crash. When I flipped bullish in July and August, it was seen as some type of heinous betrayal to those ursine folks. In a similar vein, I was welcomed into the perma-bull camp in the back half of 2010, as well as during the first quarter of this year.
At each juncture, there was significant “peer” pressure from each of those groups to stick with a given bull or bear thesis come hell or high water. And, at each juncture, I could not care less what the dogmatic types thought of me, as I simply stuck with my strategy of interpreting the ever-changing price action and character of the market on a daily basis.
One of the most pathetic sites in life is seeing a grown human being who clearly needs to seek approval from another person or group of people, in order to justify their own self-worth. When that mentality carries over into and affects your trading, you are bound to have major problems, especially in this day and age of social media. Accordingly, you should be highly discriminating with the virtual company you keep during the trading session.
I write these seemingly harsh words to convey the message that you should avoid succumbing to trader peer pressure as much as possible. The great thing about our premium services in iBankCoin (The PPT, 12631) is that we have traders with all types of styles and strategies. The camaraderie of a strong trading community is immensely important. However, you should not be afraid to be a one-man gang when necessary.
What you get in this blog is the most consistent, disciplined, prolific work of any technically-driven trader on the internet, bar none. I do not take convenient multi-day/week breaks from this blog nor Twitter, and especially not from the 12631 Trading Service when the going gets tough in the market. Instead, I hunker down and work through it, even if I determine the correct position is to be in 100% cash. While the barriers to entry are low, there is a reason why no one has been able to recreate the magic of the 12631 Trading Service that @RaginCajun and I built two years ago with blood and sweat.
As an example of not giving into a perma-anything camp, I have recently been bearish on the precious metals. Last Friday, I decided to close out my bearish bet on gold in the form of being long DZZ (double-short ETF for gold) inside 12631, in part to lock in profits (I sold at $5.17 after entries at $4.91 and $5.05).
In addition to profit-taking, the metals are closing back in on what should be major levels with plenty of price memory. Thus, I am moving to a more neutral stance on the metals, as they may very well find some support here if only for a week or two. The weekly chart of SLV, ETF for silver, indicates that price is back at $26. Stretching back, you can see how important that level has been. If you are trying to bottom-pick silver here, that is a pretty good reference point to use in order to manage the downside risk of your trade.
Longer-term SLV may very well deliver a complete gap-fill down to its primary breakout in 2010. In the meantime, though, focus not on seeking approval from other traders as branding yourself, “the guy who is a metals bull,” or bear, or anything else for that matter.
Just put in your daily work and focus on making the correct tactical decision each and every single time.