In last week’s blog (Hope Springs Eternal: Why You Need a Trading Process) I demonstrated once again the process that Lex and I use as professional investment managers to generate high quality ideas using our Checklists. One such setup was in gold, which I highlighted as my favourite trade idea (short) in the Trading Club last week.
I wrote: "Here is one of my favourite setups for the coming month, in gold. With the Checklist at -3, and the technicals looking like they may be rolling over, this is certainly a setup that I have on my watchlist this month."
At the time of producing the idea, futures on the precious metal were trading at 1306, having twice tested (and failed) the 1320 level coincident with an overbought hourly RSI. You develop a ‘gut feel’ for these things as you gain experience as a trader, and to me it felt ‘right’ to expect further selling pressure. Nonetheless, I had already put the process first which perhaps gave me the confidence to see (‘feel’) things for what they were, rather than allowing doubt to cloud my judgement, and crucially, pull the trigger on the trade.
As you can see from the screenshot below that I took exactly one week later, this turned out to be a really sweet trade, netting 1.3% (the market is currently lower at 1289)...
Now 1.3% may not sound like a lot to some of you triple leveraged VIX traders, but if you were capable of producing that week-in and week-out, then your account would be worth almost double over the course of a year at an annualised return of 96%!
When it comes to trading you know that we prefer to play the long game, and even 1.3% per month would be sufficient for you to post double-digit returns on a yearly basis - the sort of performance that would get you noticed if you could sustain it. So whether you are happy trading your own account or looking to develop a track record for a shot at managing outside money, the high quality idea generation and consistency that our Checklist process provides can really transform your chances of success.
I’ll leave it there for today wishing you a very pleasant weekend, but if you would like to join us for our full analysis including new insights each week, or learn from the ground up with online tuition from Lex in our MDT online course, then get it touch and take your financial knowledge to the next level right away!
PS Don’t forget the deadline for contributions made in the current UK Tax Year ends at midnight tonight!
Have a great weekend,
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