Shorting Gold

Seasonal Patterns Short Trade on XAU/USD Daily Chart

Funny where trade ideas can come from. I received an e-mail from someone I have subscribed to receive seasonal pattern information some time back. In that e-mail, there was a trade idea to short Gold Futures from March 2 to March 25. The pattern worked for 14 out of 15 years.

You may be thinking that this is all hocus pocus, sales gimmick. But I see it as a potential opportunity.

With all opportunities, no matter where the idea comes from, always comes with a risk of loss. So as long as you are able to quantify that loss amount and are comfortable with it, you can take advantage of the opportunity.

I have learnt over time that before thinking of the potential profits, I must weigh the potential loss amount and design ways to limit it to an amount that I am reasonably comfortable with.

In any form of trading or investing, that is the only thing we can control... the loss amount. We can't command the market to give us a certain amount of profit, let alone tell it which direction to move just because we want it to go that way. All we are able to do is to limit our losses and when the market decides to give us profit, we go with it for as long as the market is willing to favor us.