Replies to post #30120 on Profunds index and sector trading (PRO)

[Gizmo]

Xau. Nice move off the bottom. Could be the tide has turned for now. Bet there's a chit load of shorts on the gold stocks.

[Namiar]

Hi Giz,

My XAU model is pretty straightforward, based on RSI4:

If RSI4 closes below 15, initiate scalp go long 35%
2nd day: If RSI4 remains below 24, increase long to 60%
3rd day: If RSI4 remains below 24, increase scalp to 90%
4th day: If RSI4 remains below 24, increase scalp to max 130%

I have made two alterations to the basic program:

1) If RSI4 closes below 7, then bypass scalp ladder move to max 130% immediately
2) If the scalp achieves 4 days with RSI4 below 24, then move scalp exit level from 24 to 40. Tomorrow will be day 4 of the current scalp. As such the exit criteria will be RSI4 > 40.

I tend to agree that XAU will likely lauch at some point for a sizeable intermediate gain. By I will not personally be participating.