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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • Silver - Watch This Close, Past Tense 0 comments
    Dec 20, 2012 12:06 PM

    Thursday 20 December 2012

    Obviously, there was no ending activity, based on the close
    in silver, pointed out yesterday in a chart to watch, but that
    is perfectly okay. The purpose of the exercise is to be alert
    for possible set-ups, for when patterns repeat, they provide
    a trading edge. When the patterns do not repeat, that is
    important information, too, for we then know to stay out.

    Why do so many people lose in the markets? They front-run
    market development, placing a bet on what they "predict" a
    market will do. Markets do not care what anyone's opinion
    is, for markets will do what they are going to do. What we
    continue to advocate is to FOLLOW, not get ahead of the
    market's lead.

    There are many who will act on UNCONFIRMED market
    patterns, and that is where problems, especially of the
    margin kind, arise. Then, egos get in the way, and the
    wait-for-the-market-to-recognize-what-it -is-supposed-
    to-do mentality sets in, and trades "get away."

    This is not a "Look at what we think the market will do,"
    example. Instead, it is "Here is a POTENTIAL market set-up,
    WATCH what happens." If the pattern held, it could have
    aided in finding an entry to get long, IF the pattern were
    confirmed. It was not. Price sailed lower, this morning, but
    so what!

    There was no commitment because there was no confirmation.
    There was no commitment because the RULES do not allow a
    position to be taken without the confirmation. In many ways,
    this is so simple, but few take the time to establish written rules
    and then ADHERE to them.

    We posted yesterday's chart as much with this outcome in mind
    as the other one of holding, for if the close did not hold, we had
    a great example how to trade successfully in any market, and
    avoiding losing situations is just as important an element as is
    finding winning ones.

    With established rules, the winning potential trades will always
    come along, but with less frequency than losing "opportunities."
    Just as the maxim holds, "the trend is your friend," so too, can the
    market be...or, it can be your worst enemy. Actually, the market
    is neutral. Like we said, it does not care what anyone's opinion
    is. The greatest potential enemy is ourselves, if we have no rules
    and the discipline to enforce them.

    The other important message from the market was, this sell-off
    ain't over. Caveat emptor!

    Questions. comments at http://edgetraderplus.com

    (click to enlarge)

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