Monday, July 18, 2016

Sharpen Investing Skill through Quiz: Gold Miners have a message

From the desk of Sagar Nandi and Superior Profit:

One of the best ways of learning to invest profitably is to identify a robust system and then practice it till the signals for Entry and Exit become second nature.

Our investors and traders alike use CUE Trading System. There are plenty of learning material on the system in Superior Profit Education Center. Videos. Books with chart illustrations. Blogs etc.

Once one goes through such learning, what next?
There are several possibilities.

One might start trading with a paper money account. Practicing the learning to see if one is able to make money in such simulation account. If one is able to make money, it might be time to move on to a real money account. Probably starting slowly with small quantities and gradually increasing size as one becomes more experienced.

Whether one is novice or experienced, it is still necessary to remain alert. And keep the investing blueprint fresh in mind. For Superior Profit Investors, that blueprint would be the CUE Chart Signals and the CUE Guidelines for Trend Following Go With Flow, Trend Reversal Headwind and Bounce trades among others.

We, at Superior Profit, have started a novel and publicly accessible way to keep that blueprint fresh in a traders mind.

Using Quiz Playground.  Where we present regular stock market quizzes - in different markets / time frames / instruments / sectors / industries etc. And invite you - serious traders and investors to respond to them. Challenging a traders ability to make a decision on the "right edge of the chart" - not looking at past chart and make easy decisions where one "could have bought and made a lot of money". Right edge of the chart is always more challenging. And the quizzes will make us get used to that. And to investing profitably as a result of that.

You reap multiple benefits by taking the quizzes.

One benefit is to test oneself. To see for oneself how confident one is while answering the quiz. Whether one is able to follow the disciplined way or succumbing to temptation to hop on a trade prematurely Is one able to stand aside when the chart is not clear? Is one able to commit to a trade without second guessing when the signals are aligned?

Second benefit - once multiple traders start responding to the same quizzes - is to see how different traders approach the same situation on the chart. Invaluable learning may be grasped from that. And one might even fine tune one's own approach from that learning.

Thirdly, you might have another golden opportunity. To gather appreciative Thumbs Up from fellow traders worldwide who are also looking at the same quiz. Once sufficient Thumbs Up is collected by you, you might be even invited to join Superior Profit Graduates Club - where all traders share their investment ideas using CUE Trading System. This is an opportunity to join smart and disciplined traders from all over the world.

Needless to say, we encourage you to give Thumbs Up to a response that you like - that is if you find the response disciplined and detailed and accurate as per (say,) Superior Profit Investment Guidelines.

Note that it does not matter if the quiz is on a stock / market that you trade or not. The aim here is to sharpen trading skills that are applicable across stocks / markets. And you would learn something through the quizzes irrespective of what stock / market the quizzes are based on.


Finally, it is of course fun to take the quizzes. Sometimes to make mistake and laugh about it and make sure next time in quiz and in real investment we are more disciplined and more careful.

Gold Mining Industry Rank worsened - What would you do?

This quiz was posted over the weekend on 17th July at Superior Profit Quiz Playground - aimed at sharpening skill on Sector/Industry as well as Stock Analysis.

You may find the latest quizzes from home page
. And you would find all past quizzes at Quiz Playground in Superior Profit Community.
The quiz on Gold Miners went like this (the actual quiz is accessible through this link):

"Here is the Superior Profit Industry Group Ranking of 158 groups ... (full list at http://www.superiorprofit.co/) showing Gold Mining is deteriorating fast for last 2 weeks. While other Metals and Mining groups are holding strong."
"What would you do with Gold Mining stocks?".
 
What is the right answer?
I would not like to give the answer here and ruin your fun answering the quiz in your own way. I rather would have you try the quiz (and indeed the other quizzes) in the Superior Profit Quiz Playground (also accessible from home page: http://www.superiorprofit.co/).

You might answer through the poll answer mechanism as well as "reply" to the quiz with detail explanation/CUE Charts etc. if you would like. 

Hint ... a note on Industry Ranking.
While I would not answer the quiz directly, here is some useful note on how to use Sector or Industry Ranking.

Superior Profit Investors regularly look at Broad Market State through Market Internals. These are posted regularly in Superior Profit home page as well as in Broad Market forum. Superior Profit traders also look at Sector and Industry Analysis and Ranking which are posted at Superior Profit home page as well as in Sector & Industry Analysis forum.

The Industry Ranking mentioned in the quiz is part of that Market/Sector/Industry weekly review by our traders. By looking at the analysis/ranking at Superior Profit site.

Now - let us have a look at the Industry Ranking that was mentioned in the quiz.

It is clear that Nonferrous, Aluminium and Industrial Metals and Mining groups (marked by tag 1 in the snap) are performing very strongly since last 6 months and are continuing to do so. They mostly held to a rank of 10 or better in last 6 months period. Very good rank considering that the best possible rank is 1 and worst possible rank is 158. For last 2 weeks and for last 1 week, these three Industry Groups are holding on to the top 3 Ranks among all the 158 industry groups. Their strength is undeniable. And if one is holding Long position in a stock in those Industry groups, one might feel confident to let profit run (of course booking some profit when the time is right - using CUE Hop Off Template for example ...).

Now about Gold Mining group: Marked by tag 2 in the snapshot, Gold Mining started out strong. Ranking between 1 to 4 for most of last 6 months. But in last 2 weeks Gold Miners Rank fell to 55. That was a sharp decline relative to other industries. But it did not stop the decline there. In the week that just passed (ending on 15th July 2016), Gold Miners Rank fell to 136. That is continued sharp decline in ranking for 2 weeks in a row.

All that is clear from the Industry Group Ranking. And it only takes few moments to read that conclusion from the Ranking Table.

What is however not clear immediately is whether individual Gold Mining Stocks are falling? Or that they are still rising but rising slower than other Industry Groups' stocks.

To know that, one might look at some actual Gold Mining Stock charts through CUE At A Glance template.

Note: If you are trading in another country, you might look at some Gold mining stock traded in that country as well. Metals and Mining companies tend to follow a global trend.

Here is one such view on well known gold miner Goldcorp (GG) using CUE At A Glance template. Weekly chart using Backdrop template on the left and Daily chart using Hop On template on the right in the snapshot below.
Reading the chart above, a Superior Profit trader immediately recognizes that it is time to book profit in existing Long positions. As the chance of falling down outweighs that of going up through the Weekly Memory Resistance and breaking out of Daily Triangle pattern in short term.

That is, it might be wiser to book profit now - full or partial ... or at minimum to tighten Stop.

One might look at few other Gold Miners. Probably the conclusion would be similar or it might be different. We have to see from those individual charts.

As for Shorting, for Goldcorp at least, the time has not come yet. It need to fall below the Daily Memory Support and then give a Low Risk Entry opportunity. It would probably be a Go With Flow Trend Following Short opportunity that our traders could identify easily using Metastock CUE Explorers.

Seeing that the Gold Miners Rank fall down sharply will let our traders take the Short confidently when and if that signal  comes in coming days.

In this way, Superior Profit traders are alert about what is happening in Broad Market, Sector and Industry. And yet, wait patiently for an actual trade opportunity to come in a stock. They don't hurry into a trade just looking at the Broad Market/Sector/Industry performance.

One might say, Superior Profit traders are able to see the forest and also look at the trees at the same time.

I encourage you to keep taking the quizzes at Superior Profit home page (for now, you might have a go at all past quizzes are accessible from Quiz Playground)and sharpen your skill and also to help others sharpen their skills.

And have fun while doing it.

​Sagar.
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