Dead Cat Bounce
Gold. Dead Cat Bounce or Rising Phoenix!
For those of you who have traded for an appreciable amount of time, you may have heard the expression at some point or the other, “Dead Cat Bounce”. However for those beginning traders who have never heard the phrase. The phrase is used to refer to a market or share price which is basically crashing, but rallies for a short period of time, before continuing on the downward spiral. This bounce is one of those pesky bull traps that often blindsides the novice investor or trader most times it happens.
One of the major differences between trained and experienced professional traders and the beginning trader is simply that the professional knows a dead cat bounce when he see one. Stays clear of going long and then pounces as soon as the major trend resumes. The Beginning trader however is still stuck in a psychological rut.
The Inverse of the Dead Cat Bounce
On the other hand, the rising phoenix deals with the stocks, shares, future, market or product which has been languishing in the doldrums, and begins to breathe life.
Again this glaring trading opportunity clearly misses the novice investor, because they remain attached to a quaint memory of this product remaining at the levels they are used to seeing it at. Even in the clear evidence of winds of change.
The missed opportunities of the rising phoenix are significantly magnified, when the beginning trader was blindsided on the way to the doldrums and has what is sometimes referred to as the snake-bit effect (Where memory of pain in a previously wrong position in the direction of the rising phoenix, makes the trader avoid the same positional opportunity again).
Now you have a simple question.
Do you think Gold is going through a dead cat bounce and is more likely to collapse back into the 800 dollars an ounce region, or do you think we have a clear case for a rising phoenix …..where Gold might now soar to heights above 1000 dollars an ounce again?
Personally, I believe none of the issues which caused the meteoric rise of Gold in this year have been removed, consequently, I am clinging on to the tail of this phoenix … With full faith and confidence, but keeping a firm eye on adjusting my money management strategies to cater for the increased volatility of this asset class.
Stay Empowered,
Ty Canning
NB: One of the training modules in the learning portal which is soon to be released, deals with clealry identifying the psychological biases which might paralyse your trading. This module is Theta Power Mind Tools (Theta PMT for Short) The whole raison de Etre of the name “TwoScrolls” is founded on the principles to be learnt within Thetat PMT.