The danger of setting your stops too close

Following a decline in the gold market, John C Burford moves his protective stop down only to see his trade stopped out as a result of a vicious spike in the gold price. Yet, his forecast of a downtrend holds true and another opportunity for a short sale presents itself.

Last week,I wrote about some gold trades: Four key traders lessons that will keep you in the game. I left it with the market trading above my central tramline T1:

MWTrader-11-06-13-1

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.