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You Don’t Need an Opinion to Trade

May 25, 2021

By: Frank Kaberna

Traders can be the types who feel the need to comment on everything. Is forming an opinion around Elon Musk and newly wealthy crypto traders beneficial if you aren’t trading bitcoin or doge? Are you doing yourself a disservice by researching lumber’s supply and demand if it’s unlikely that you’ll take a position? Is your witty social media post about Taylor Swift worth upsetting the Swifties in your life if you don’t listen to her music?

In trading and in life, relieving yourself of an uncompromising opinion can sometimes empower you to enjoy the simple back and forth.

$2,000 Gold? $1,500 Gold? Or Neither?

Gold started the year just above $1,900 and concluded last Thursday just below $1,900, but it has journeyed as high as $1,980 and as low as $1,675 on its way to about unchanged in 2021.* Trading precious metals on a neutral basis has presented more action this year than looking for a breakout.

Gold \ GC

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Source: dxFeed Index Services (https://indexit.dxfeed.com)

 

Journey Over Destination in SPRE

Small Precious Metals futures - gold, silvers, and platinum in one small, standard, and simple contract - has reflected a similar range on a smaller scale. As of last Thursday, SPRE is down 0.46 on the year, but it has travelled 68.90 on its way there.** Trading mean reversion (buying on large dips and selling into large rallies) could have created more opportunities in the first half of the year then picking a long-term direction.

Small Precious Metals \ SPRE

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Source: dxFeed Index Services (https://indexit.dxfeed.com)

 

This is the type of strategy professional traders are talking about when they reference price action. Few market makers or proprietary traders show up each day with a “hunch” on where prices are headed. Many attempt to profit from taking the other side of short-term divergences from the mean, but with strict mechanics.

What’s interesting and what’s potentially profitable can often be two very different things. The profiles of doge traders and features on the rights to Taylor’s music are nice conversation pieces, but do they put a dollar in your wallet?

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Save Every Time You Trade the Smalls

The Small Exchange has also created a limited number of subscriptions for a one-time payment of $100 that give traders a lifetime of reduced exchange and market data fees when trading the Smalls.

For more information on the Small Exchange’s products and subscription service, visit smallexchange.com. And be sure to check out my new show on tastytrade, Small Stakes, where Pete Mulmat and I will show viewers how to navigate Small Exchange products every Monday-Friday and always on demand.

If you’d like to find out where to trade the Smalls products check out the list of brokers that offer their products, or tastytrade’s preferred broker tastyworks


*Gold futures prices from 1/1/21 to 6/20/21

**SPRE index daily close values from 1/1/21 to 6/20/21

© 2021 Small Exchange, Inc. All rights reserved. Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information in this advertisement is current as of the date noted, is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading futures involves the risk of loss, including the possibility of loss greater than your initial investment.


Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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