The price of gold is now in its fourth year of a bear market. It is shocking to many gold bugs that gold, a metal revered since ancient times, could fall so dramatically from its all-time high of $1,920.56 on September 4th, of 2011. The precipitous drop of almost $800 in less than four years was more than most gold bugs could stand as stocks soared to new highs. Many threw in the towel when gold hit $1132.05 on November 7th and moved into stocks. This could prove to be a bad omen in the future. Since reaching a low on November 7th, gold has for the most part moved sideways with a slight upward bias.
You can clearly see on the chart that there is a big divergence that shows. When prices were making their lows, momentum was building for the market to bounce.
Now for the good news!
Gold is now entering into a very exciting time window and is in tandem with the Trade Triangle technology. My research has indicated that the second and third quarters of the year are the best quarters to trade gold and make money in this market.
Out of the 30 quarters I tracked, results showed a 66% win rate and made $160,273.50 less commissions on a $10,000 investment. For every dollar you risked in trading during those quarters, you would've made 10 back in return.
While the Trade Triangles do not predict where gold is headed, they do follow the trend whether that's on the upside or downside.
At the moment, the major trend in gold is negative to sideways. However, that could all change if spot gold moves over the $1,220 level. Should that occur, then I would want to be long gold. In the meantime, you should be on the sidelines based on the Trade Triangles.
Here are the average quarterly results showing the quarterly dollar returns trading one futures contract of gold. All of the signals for spot gold can be seen daily in the World Cup Portfolio that is available to you.
The first quarter and fourth quarter of any year tend to be good, but they are the least productive in trading gold. Quarters two and three are without question the most productive and have shown historically over the past eight years to be the ones to focus on. For example in Q2 for every dollar you risk you made $12.91 back. Q3 was even better than that and by far and away the best quarter of the year for gold. For every dollar you risked in Q3, the market returned $22.31 over a period of eight years.
While it is not possible to guarantee returns like the ones above, and risks do play a part in any type of trading, the odds would seem to be overwhelmingly in your corner when you focus on the gold market in the Q2 and Q3.
Q1 average return over 7 years. -$731.21.
Q2 average return over 7 years. + $7,788.00
Q3 average return over 8 years. + $8,783.25
Q4 average return over 8 years. +$6,745.25
All the results are based on trading one futures contract. Presently the margin for trading one contract of gold is $4500. A gold futures contract represents 100 ounces of gold.
So you can clearly see there could be a great opportunity coming up in the next two quarters. I would suggest if you decide to employ this strategy that you double the margin to $10,000 to give yourself some wiggle room if the first two or three trades do not work out in your favor. The important element to remember is eventually the market will reward you. That has been the historical norm in the gold market.
If you have any questions about this post, please do not hesitate to leave a comment below. For those of you who have already left comments on the blog, thank you for taking the time.
Now let's get to work and see how Q2 shapes up for gold and the Trade Triangle technology.
Every success in trading gold in Q2 and Q3,
4 thoughts on “My Secret Formula For Successful Gold Trading”
Well here's hoping you make up some from being dead wrong all the way down in this gold bear market since 2011, the huge volume of bullish contributors you spotlighted was also a big clue as to your position.
Thank you for yor feedback. Not sure I can totally agree with you as our Trade Triangle technolgy did very well in catching the down move. All you have to do is put in the Trade Triangles, weekly and daily and do the math. I am sure that when you use the weekly TT for trend and the daily TT you will see that it made a positive return over time.
As I mentioned a move over $1,220 this coming week will change the trend and signal a buy signal gold. Let's see how it works out.
nice clear view. Thanks Adam. I feel that one has to be cautious in the end of 4th. quarter due to tax loss selling. What is your view Adam?
Thanks for your feedback. Two things happen in Q4, tax selling and markets tend to get less liquid so caution is advised.
All the best,
Comments are closed.