A Timely Purchase Of Gold

There are different ways of devaluing your currency. The Swiss used market intervention; the US used a big boys’ version of the UK’squantitative easing. Gold rallied as the Dollar was smashed for six.

Blimey, what a 24-hours! There’s little point in talking about levels today (Thursday) as they’re likely to be somewhere else by the time I finish this piece. You can check out the Fed details in Moley’s excellent piece. My blog will concentrate on my dealings over the past 24-hours.

Yesterday’s luck continued with a timely purchase of gold. I said yesterday that I was still holding off from buying as the price looked set to test the $880-890 level. I watched as the price broke $900, then $890 and when the fizz looked to have gone from the down move I bought a cautious £1 long bet at $886. I planned this as a way of edging into the market, probably buying more at close to $880.

But returning from rugby I had to do a double-take. In fact I checked the price on a different screen in case it was an error; $942!!! This morning, with the price $10 lower, I did wonder if last night was just about squeezing a few bear positions and today might see a re-trace down to the lows (at that point I hadn’t fully read, or digested, the full implications of the Fed’s move). But the price held firm around $930.

This afternoon I added to my position at $939 and $946, but sold £1 out to take a quick £100 profit. I’ve trailed my stop up to $946 on my original bet, just to make sure of a £600 profit.

I made a dangerous £30, selling FTSE (^FTSE) this morning. The market was selling off, having failed to hold 3850, and I had a good signal on my 30-minute chart. I was just off on the school walk but decided to sell £3 at 3815 with alimit order to close out 10 points lower. I was relieved to find that I’d been filled in my absence as the market was now tracking higher.

Not everything worked today; this morning I bought EUR/USD in a fiver at $1.35. I reckoned it had a good run ahead, but closed out £3 at $1.3520. The market then seemed to die so I called quits and closed the balance at break-even. The rest, as they say, is history!

And finally, here’s probably the best loss I’ve ever taken! Yesterday afternoon I broke my discipline of not dealing just ahead of the Fed meeting. Don’t ask me why; I guess I felt a need to make an offering to the trading gods for earlier profits. I mentioned in yesterday’s blog (UK Jobs Data Trashes Sterling) that I’d sold GBP/USD in £1 at $1.3965.

I missed a couple of opportunities to close out for the price of a pint and was left with a decision as six o’clock approached. Should I hang on and hope to make some money or should a take it on the chin. The answer was obvious really, especially as I was due at rugby training when the statement was released. I closed out for an £11 hit, kicked the cat and forgot about the markets for a couple of hours. If I’d made the wrong decision I’d have been looking at a loss of somewhere around £200, as I’m sure my stop wouldn’t have been triggered anywhere near the level last night.

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