Socrates Beneficial Trading Tools
Mitigating Trading Risk for GLD Calls
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February 4, 2016
We are finding that the Socrates ‘Trader Level’ has many tools that we can study before we make a Trade or that we are using after we have made the Trade. We are putting in a lot of time to understand and then use those tools.
We are all Risk Adverse and Socrates with its ‘Risk Management Model’ tool helps us mitigate risk. Its ‘Trader Level’ Risk Management Model tells us what the Upside probability or the Downside possibility is on a percentage basis. The percentage may be big or small.
Today this is what the Risk Management Model tells us for the GLD (my emphasis but, this is Socrates talking):
Our risk models show a window on each level as follows: On the daily level, we see a 5.175893% risk on the upside, whereas on the downside, the risk factor comes in at 6.272551% for now. From a risk perspective, resistance on a closing basis stands at 113.99 whereas the risk on the downside begins at 101.31.
Looking at the weekly level, we see a 4.556292% risk on the upside, whereas on the downside, the risk factor calculates at 15.98668%. From a risk perspective, resistance on a closing basis stands at 113.25 whereas the risk on the downside begins at 90.81.
Turning to the monthly time level, we must respect that there is a 14.76224% risk on the upside, where we show a clear downside risk factor at 27.03303%. From a risk perspective, resistance on a closing basis stands at 126.81 whereas the risk on the downside begins at 78.87.
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GLD Trading Alert: We still expect Gold to go higher and if gold stays above 1047.00 tomorrow then we will stay the course but - - if, during trading tomorrow, it goes below 1047.00 - - then we have to curtail our resolve somewhat and we will sell half our positon in the GLD on the premise that a profit is a profit.
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Yes, we are being very careful with our trades and want to mitigate Risk as much as possible and we are able to do that with the aid of Socrates. Martin Armstrong has told us well in advance that Gold is going through the Benchmarks in March or April and therefore, our analysis tells us that there might be a Mini Crash at that time (the mini-crash will hopefully produce THE low for Gold).
For the time being we are still long Gold but, we have to be careful with our Bullish trades. The trick is to sell before there is a Mini Crash and to start we will have to analyze the close tomorrow. The close at the end of the Week will give us an idea as to when we might want to exit our GLD trade.
Although, our Calls 100 GLD expire on February 26 and there is still a way to go, we have to be diligent. If indications are that we are getting to close to a Mini Crash for comfort then we will take profits (we can never go broke taking a profit). So the Friday Close for Gold is very important for us to see “What the Future May Bring Us”.
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When making a Trade, long or short, we immediately consider an Exit Strategy and we do this by looking at the break-through of previous Bullish Reversals or, as the case may be, the Bearish Reversals and we pay attention to the Socrates Risk Management Model. We pay attention to the Risk and when Socrates tells us that the Risk is too high then we exit the Trade, even if we have to take a minor loss.
Before buying or shorting we have a plan and listen carefully to Socrates’ forecast which may suggest to buy or to warn us to get out.
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Stay Tuned for our Next
Paid-for “Looking over the Horizon” FDNN letter!!
Happy investing, from Mining Interactive Corp. and Nick in Vancouver, Canada.
Nick L. Nicolaas
Direct: +1 (604) 657-4058
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February 4, 2016