Never Use Stop Losses When Trading Gold

COMEX:GC1!   Gold Futures
Last night you got to see the Criminal cartel in action while you, the SEC, and the CFTC are all sound asleep. While you might wake up & realize whats going on, I can assure you the regulators will continue to sleep through this one.

So at 4am somebody bombs the Comex with a sale of 40k contracts. I went through 60 other Futures charts across all asset classes, and nowhere else did you see anywhere near this type of volume . Not surprisingly, price undercuts the recent low to ensure all stops are taken out and to create a negative bias to start the trading week. Gee, I wonder who this could have been? Must of been Barrick or Newmont placing their hedges for the week. They do it at 4am because there is practically no liquidity and they want to ensure they get the worst price possible for their product.

Managing Risk is job number 1,2, & 3 for any professional Trader, but if you hold overnight positions you simply can't do it via stop losses in the Market. You are painting a big bullseye on your back & letting the banksters know when, where and how to rob you. You can be assured that positioning of all retail is aggregated into "Big Data" and sold to the highest bidder.

This is where options are your best friend and should be used when taking a directional view on Gold in the Futures Market. If you go long a Future & create your stop by buying a protective put, then you immediately remove yourself from this type of nonsense.

Buy long dated protection because Theta is very low.. Even if price doesn't move for a few months your option will retain most of it's value. Shorter dated protection looks cheaper because you pay less on a nominal basis, but value erodes much more quickly as you get closer to expiry.

You can check my prior post on Gold for how to structure a trade that has 3-1 R/R, gives you 120+days for the trade to work, and ensures you avoid this type of criminal behavior on the Crimex.

Good Trading to all.


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