pasteThis post is being republished from yesterday.
Signal(s) that give high probability risk adjusted direction helping you to choose your own trade parameters.
The Arora Report provides eight types of information on gold, silver, miners and other precious metals.
- Signals meet our criteria and have produced unrivaled performance in both bull and bear markets. Signals range from very long-term generational opportunities to very short-term. Depending upon market conditions, many signals may be issued in a short time or no signals may be issued for a long time.
- Signals Limited do not meet our strict criteria but have significant merit for aggressive investors.
- Ratings are provided for six different time frames for those who always want to be actively trading or investing in gold .
- Allocation provides guidance on how much gold is appropriate for long-term investors at a given time who prefer to always want some gold in the portfolio but do not want to trade a lot. This number ranges from 0% to 20% of the total portfolio.
- Gold is included in the model portfolios for medium-term to very long-term when risk reward is very favorable.
- We provide information typically on a daily basis in the Morning Capsule on key developments in the gold market and macro as well as geopolitical events that affect gold.
- Intelligence on precious metals with original insights and unique analysis as dictated by market conditions to give an edge to precious metal investors.
- Support resistance zones along with probability for each zone and money flows by important categories. This is useful for short-term traders when used in conjunction with gold ratings. This information is provided only in ZYX Buy and ZYX Short.
Please scroll down to see examples of use, understanding probabilities, understanding fund flows and understanding zones to apply to actual trading.
RESISTANCE ZONES IN DOLLARS
| 1323 – 1331
| 1303 – 1309
| 1273 – 1278
| 1253 – 1263
|1220 – 1226
|1194 – 1208
| SMART MONEY
| MOMO CROWD
|| VERY POSITIVE
| SHORT SQUEEZE
- Very, very short-term rating is positive, gold price is significantly under the highest zone listed in the table above and the probability for this zone is 75%, the ‘smart money’ fund flows are positive, momo crowd fund flows are positive and short squeeze fund flows are positive. This is supportive of taking a long position for a very, very short-term trade. Consider managing the trade using price action.
- Very, very short-term rating is positive, gold price is significantly under the highest zone listed in the table above and the probability for this zone is 75%, the ‘smart money’ fund flows are negative, momo crowd fund flows are positive and short squeeze fund flows are positive. This is supportive of taking a very small long position for a very, very short-term trade with a tight stop and understanding that the risk is high. Consider managing the trade using price action.
- Very, very short-term rating is negative, gold price is significantly over the lowest zone listed in the table above and the probability for this zone is 70%, the ‘smart money’ fund flows are negative, momo crowd fund flows are negative and short squeeze fund flows are negative. This is supportive of taking a short position for a very, very short-term trade. Consider managing the trade using price action.
In the context of the tables above, probability simply means the likelihood of price reaching the zone listed in the very, very short-term.
Probability of getting heads in a fair coin toss is 50%. Probability of 70% means that there are 70 chances out of 100 for that zone to be reached.
One of the most important contributions to profitability in your trading will be Nigam’s Second Law of Investing, “Nobody knows with certainty what is going to happen next.” For this reason, THE ONLY WAY to be consistently profitable over a large number of trades over a long period of time is to think in terms of probabilities. If anyone tells you any different, run away from them as quickly as you can as following them will lead to losses over a large number of trades over a long period of time.
Understanding Fund Flows
Fund flows are one of the most important determinates of the success of a trade. For gold, the three most important categories of fund flows are shown in the table.
It is common sense to side with the smart money.
Momo crowd is often wrong but can run up or down gold farther than you would think in the very, very short-term.
A short squeeze can cause a vicious move up. If you can get in the beginning of a short squeeze, it can be very lucrative. However, it is important to remember that all short squeezes eventually end.
Retail traders are wrongly taught to depend on single support resistance lines on a chart. Professionals know this and often use hunt and destroy algorithms to eat mom and pop’s lunch. Consider using zones. For more information please see .
Six Important Concepts
- Over trading is one of the most common failure attributes. Consider developing the self discipline of trading less by taking only those trades where the setups are exceptionally good. It is common for good trading setups to occur in clusters. In other words, lots of good trading setups can occur quickly in a short period of time often followed by periods when there are no good trading setups for a long period of time.
- Half of the battle is being there when good setups occur and patiently waiting and observing when good setups are not there.
- Long-term investing typically has positive expectancy. In other words, even if you are not a particularly good investor, you are still likely to make money.
- Short-term trading is a zero sum game. When you win, you win at the expense of someone else.
- Winning requires an edge. The Arora Report provides you with several edges.
- Markets are not your slave. Please see notes in Getting A Running Start Guide.