Gold vs Oil, a question of volatility.

Volatility is a day trader's best friend.

Which is why I was trading and playing with Energy stocks a little while ago but they flattened out so I switched to gold ETFs...as much for variety and a little more intraday volatility as anything else. The energy stocks were Talisman, Suncor and HED (Horizons betapro bear energy fund).

I found that HED was traded really thinly and did not look like a good ETF to use as a daytrading bear player, so I don't think I ever actually placed a trade there. I should really try it sometime just to know though.

Now I am playing with HGU, HGD, the bull and bear versions of the Horizons Betapro gold funds, and they seem to work out well enough...although they have also flattened out and now are trading with far less than a level of volatility than I like.

BUT....

Trading a plan must consist of making a plan and sticking to it, as long as the plan is not flawed beyond hope in the first place. My issue has always been that I set up a strategy, I play it for a bit to work out some of the bugs. Perhaps I breakeven or even lose a bit in the process of testing it out, either is my expectation to a certain extent.

In the playing and testing I find the plan very workable only to find that something changed along the way. It may be my expectations (timeframe, profit targets, price move desired...etc) or some facet of the stock itself in the way that it reacts or leads the market, index or other related stocks. Once I hit this point I usually shift to another strategy, change the stocks that I am working with or something to force some sort of change in the results.

THEREFORE....

I know that my plan is very functional and the strategy is based on good testing and real enough numbers that I am comfortable sticking with it. So in this vein I am not going to switch back to energy at this point. Even though I have worked it enough I could do so with 20 minutes of preperation...I did it when I switched back to gold even though I changed to ETFs rather than stocks....I will stick to the plan. Unlike trying to hold a stock through a drop in price as a buy and holder might do I will hold the stock (ETFs) in my trading plan through a lull in volatility.

The part of the plan that allows this holding pattern is my timeframe and return goals. I have mentioned it many times in the past but I will refresh it hear...this gives me some confirmation too.

Timeframe: 40 weeks of trading 4 days a week. 160 trading days of about 260 market days
Goal: 1% return per day on average

Given my timeframe I have missed something like 21 trading days this year...I have over 70 spares left to use up. My goal is way off so far as I have not turned a profit yet, overall.

So, that is about all of a pep talk I am going to give myself today. I shut down my trading platform to look at later...maybe after 1300h once the 200 sma has caught up to give the prices something else to supply supoort or resistance. I am expecting a drop in price in gold and therefore the HGU ETF. I had actually considered just buying HGD at one of the earlier lows (peaks in gold and HGU) and holding it for the day but I have a hard time with trades longer than a few minutes now...I could have just used a wide margin VTSO I suppose and I should consider this in future again...as a backup for a longer term trade.

Jeff.