Trade Review: DUST

If you have been following Gold or their ETFs such as DUST or NUGT, you've noticed how crazy their range has been.  I have personally traded DUST just because I can manage the trade a bit better with 1 cent spread.  So, yesterday NUGT bottomed and DUST topped.  There was a nice up trend in NUGT and a nice down trend in DUST.  We will speak of DUST for the remainder of this write-up since that is what I traded.

My plan entering today was if DUST opened green, it could have more room to the downside for a short.  On the other hand I was also prepared if it gapped down, I knew there was support there for a bounce.  Below is the 30 minute chart from yesterday.  I figured if it gapped up towards 16.50 I could take it as a short.  But if it gapped down towards 15 or 15.50 and held, I had a strong bias for a long.

Here is the first hour of action.  within the first 5 minutes, it held the 15$ that I knew had some significance and then re-claimed the 15.50 level and began to build over it.

My original add was 15.49 as a starter position and continued to add as it built the flag we see above.

 
As time went on, it seemed to breakdown on an intraday look, breaking below VWAP.  In my younger days, I probably would have been freaked out by this dip and sold.  BUT, what I had on my side was a bias with important levels to trade around.  As I said earlier 15 and 15.50 was areas of interest on this chart.  This was a little fake out and it didn't do anything wrong technically on the chart.  Was it ideal that it dipped down, No.  But this is the stock market, it wants your money it wants you to make emotional decisions.

So what would be your guess of the chart now after seeing all that you have seen?  Is it going to break down?  Lets find out.

The stock breaks out and runs right into its next resistance point.  When a stock does exactly as you planned it is easy to trade/manage it without emotions coming into play.  Its so important to have your levels of support and resistance known and drawn, because at the end of the day we know stocks move from support to support and resistance to resistance.

Before you enter a trade. make sure you have these 3 things:  A bias, trend, and room to move.