Is Silver 14% drop a sign of the bears coming ?
Imo, it is not ! Working on the bigger time frame like weekly and daily, Silver is still enjoying a bullish run.
It had a pretty serious tumble last night, collapsing the price to more than 14% at one stage.
A few important lessons here :
1. Commodities be it silver , gold or palladium are highly volatile in price movement as we had seen its parabolic bullish move , providing more than 150% returns since March this year. So, is a 14% correction too much ?
2. Position sizing - I have stressed many times regardless of your confidence on the market, keeping your position size small and consistent , ie. 1-2% of your capital. Do not increase to 3-5% just because you are in the mood or feeling exuberant about some stocks. This inconsistency will sabotage your own account when market goes against you.
3. Chasing high price - i still get questions from time to time regarding the entry of a share/ETF or commodity. The logic is simple - It could be near the peak and an imminent correction is forthcoming. Plus, you would need a higher stop loss as you move up the ladder. Thus, it is important to understand the impulse and correction wave of the price actions.
4. Concentration risks - If you are already investing in Silver, then maybe you want to reduce on mining stocks, ETFs or other commodities so that your portfolio is not overly concentrated in one sector.
I am still bullish on Silver and had entered accumulated at 25.30 early this morning.
Trade safely, always use a stop loss and employ proper capital management.
It had a pretty serious tumble last night, collapsing the price to more than 14% at one stage.
A few important lessons here :
1. Commodities be it silver , gold or palladium are highly volatile in price movement as we had seen its parabolic bullish move , providing more than 150% returns since March this year. So, is a 14% correction too much ?
2. Position sizing - I have stressed many times regardless of your confidence on the market, keeping your position size small and consistent , ie. 1-2% of your capital. Do not increase to 3-5% just because you are in the mood or feeling exuberant about some stocks. This inconsistency will sabotage your own account when market goes against you.
3. Chasing high price - i still get questions from time to time regarding the entry of a share/ETF or commodity. The logic is simple - It could be near the peak and an imminent correction is forthcoming. Plus, you would need a higher stop loss as you move up the ladder. Thus, it is important to understand the impulse and correction wave of the price actions.
4. Concentration risks - If you are already investing in Silver, then maybe you want to reduce on mining stocks, ETFs or other commodities so that your portfolio is not overly concentrated in one sector.
I am still bullish on Silver and had entered accumulated at 25.30 early this morning.
Trade safely, always use a stop loss and employ proper capital management.
Comment:
up , up and away....
Comment:
Praise Lord, congrats to those who followed.
