I have always had an affinity and strong intuition with gold for some reason. I believe this might be because I was born right smack in the August 1976 gold low period. However, I am not a gold bug and I enjoy trading from both sides of the market. I started trading stocks online in 2000 when I began my professional career in technology. In 2002-2003 I started to get heavily involved in trading gold stocks, which were starting to put in some very wild moves during that time. In 2003-2004, I discovered gold futures, which traded electronically on the ECBOT platform (now owned by ICE metals). Once COMEX gold was made available on CME GLOBEX in 2006, I moved over to trading the GC contract as that is where the volume started to flow.
My goal with this journal..
I have had big up years and big down years in gold for 13+ years now. Until recently, I always traded with a discretionary bias, which has had led my account into highly volatile swings. I have mostly traded gold as a form of entertainment and not for a living until recently. I am of the strong belief that by embracing a solid trading plan and system, that I can turn each year into a more consistent and profitable business.
My system:
A. This is a trend following/swing trading system. Trades can last anywhere from 1-10 days. It trades from both long and short sides but with a directional bias.
B. I use three timeframes to size up the gold market:
1st Timeframe: Weekly Gold Chart
This tells what the long-term trend currently is. There are only two indicators, which is a backtested EMA crossover, and a MMO (Murrey Math Oscillator). When the primary trend is active (now bullish since February), I trade with +2 GC contracts when the 2nd and 3rd timeframes are aligned. During counter trends, I only use -1 GC contracts since our risk/reward will typically be less during these periods.
2nd Timeframe: 1HR. Gold Chart
This tells me that the short-term trend is either bullish or bearish. The only indicator used here is a custom fitted MACD. When the MACD is on a BUY, I then look to the 3rd timeframe to enter +2 long. When the MACD is on a SELL, then again, I look to the 3rd timeframe to enter -1 short.
3rd Timeframe: 19min. Gold Chart (This is our entry chart)
The only indicator that I use is the Slingshot indicator, which can be found here:
There is nothing highly special with this indicator as it is essentially just a 38 & 62 EMA crossover. I had used a similar EMA crossover pair until recently as I find that the Slingshot EMA pair reduced whipsaw entries. One important aspect of this timeframe is that if we have a new signal change on the 2nd timeframe, we wait until a new entry signal is generated on the 3rd timeframe before entering (i.e., we dont just jump into the market on an existing signal).
My platforms:
Monitoring Charts Tradingview.com
Execution Charts NinjaTrader 7 (Automated Live)
Backend Platform Windows 2012 Server on Amazon EC2
Data Feed (Primary) Kinetick/IQFeed; (Backup) IB Data Feed