NUGT, gold, DUST, whatever trading vehicle you wanted to use to trade gold today, trended perfectly the entire day. What do I mean by that? Every bounce was faded and it continued to trend down the entire day. Take a look at the example from above. There were numerous opportunities, with small risk, to trade in it today. What makes this different than a stock that didn't trend perfectly all day? Let's take a look at the daily chart.
First thing to notice is that for the past month and a half, NUGT formed a bottom, right around the $17.50 area. Second thing, it gapped below this range to begin the day. Third thing, Look at all the room below this range. It had the room to move and trend properly. All these things together brings the perfect storm for an all day trender.
BUILDING BLOCKS
I like to look at stocks as building blocks. Of course they need to have the room to move to trend properly and build these blocks. But lets show an example of what I mean.
In this example, you can see how NUGT trended today. each flag or block was building underneath the previous block. Looking at stocks as blocks has simplified things for me. If you are in a trending stock, the blocks should be building on top of each other in an uptrend and building below each other in a downtrend.
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