Update …

Volatility in nearly all markets is now really picking up. That also means we should soon see solid trends start re-emerging.

Yesterday, the nearby gold futures contract (October 2016) fell as low as $1,312.70, retesting the important support shelf at $1,305 to $1,310. Silver fell as low as $18.715.

We may get another day of bounce now, or even two in the metals, but the trend remains clearly lower along with the cycle forecast, into October.

Unfortunately, you should have been stopped out yesterday of your shares in UWTI. That really stinks, as the trend for oil still appears to be firmly higher. I may have you reenter UWTI at any time, so stand by.

Speaking of UWTI, I’d like to point out how tightly I managed the risk for you, knowing that oil was volatile as we entered the position. You should have been able to buy your shares at roughly $22.78 and my recommended protective sell stop was at $21.03. Perhaps that was too tight, but it did serve its purpose and stopped you out when the price of crude oil broke a short-term support level.

My main point is this. Your loss was roughly $1.75 per share, not counting broker commissions and fees. You can call that a 7.68% loss on the position ($1.75/$22.78 = 7.68%) – but in terms of overall money management, the loss is far less, and that’s how it should really be viewed.

To explain further, I recommended that you allocate 3% to that trade. Assuming a standard $25,000 in equity, that would mean allocating $750 to the trade. When recommended, UWTI was trading at $22.78, so you would have bought 32 shares ($750/$22.78 = 32.9, always round down, so you would have bought 32 shares).

The loss was roughly $1.75 per share, or a total of $56 (32 X $1.75) not counting slippage and broker fees). On a $25,000 theoretical account, that amounts to a 0.224% loss. Very minor.

I am not making an excuse for a bad trade. I am not putting a positive spin on it either. My purpose is to help you look at the bigger picture, for it’s the bigger picture that counts, not any one particular trade.

In fact, it is entirely possible to have 90% of your trades as losers, only 10% as winners, and still be profitable overall. You do that by keeping your gross risk very low, and when your winners come, let them run for the touchdowns.

Of course, the flip side is even better, the more winners you have, the better – as long as you still tightly manage risk.

That said, many of the current open positions are looking good, and cycles still point lower into October.

Hold all open positions and related stops, including yesterday’s reco to add shares in SPXS.

All the best, and stay tuned …

Larry