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Trading Lessons

Betrayed By The Gold Silver Ratio ? Gold Bug heresy? 

Commodities / Gold and Silver 2016 Jan 12, 2016 - 12:03 PM GMT

By: Denali_Guide

Commodities

“ET TU BRUTE ?” “Cuo Bono ?”

         “It's a long time from now to never....” Says 'John Snow' in Game of Thrones. In my opinion, probably as far as from here / now to “It must go back to....” uttered so much in  the worship of the Gold Silver Ratio (GSR).   And yet it doesn't, at least not until you suffer your stops being run and a loss of capital, or worse.  Your Capital was just betrayed at the hands of The GSR.


 And it was supposed help you, yet it stabbed you in the back.  I guess that is a lesson you shouldn't fool around with a naked Gold Silver ratio, no ?  I can talk later about how a “gussied-up GSR might work.

         In my experience far more tears than dollars came from using the GSR.

         Yes it betrayed you and your capital too.  Like the YouTube video,

 “Its GONE”!

         The Gold Silver(GSR) ratio has run from Negative numbers, to triple digits.  But  no matter what formation it is, nothing MUST Happen by virtue of its appearance on a chart.   Over time, some over/under shoots of mean measures, may return to the area of the mean, but that does not specify when or for how long.  Its easy to point to the historical extremes and say because its a “coiling formation”, it MUST return to the mean.  I don't think anything could logically be further from the truth.  The measure, in this case, the GSR, may run in that direction but is compelled by NOTHING to move that way.  After experimenting with the GSR(Gold Silver Ratio), I cannot ascertain any “force” that would make the GSR return to any particular level.  I know it is a warmly held belief amongst us Gold Bugz, but I can't hold onto it anymore.

        SPREAD TRADERS can profit using The GSR as a rough guide to timing,  ultra long term or very short term.  Gold Bug style Investors capital, get either a figurative death or dismemberment using GSR.  Think the last time you had your stops run out from under you while you were sure either Gold or Silver “Had To” run wild based on a very distorted GSR.   I bet no one wants that outcome again, except whomever was running your stops.

         Please Google “Images” under the “Gold Silver Ratio” heading if you want a good picture of what I find an inaccurate and confusing measure for GoldBug Investors to attempt to use. 

         What the heck are we supposed to do now if we cannot trust the GSR to help us profit ?   Stop using the GSR naked  !!  Like when you find yourself in a hole, stop digging yourself deeper !!  The second part of this, the Real Answer,

was so succinctly put by a not-famous but successful  acquaintance who has a way of summing up, in this case “I am always more interested in getting the direction correct than trying to decipher the extent of the move. “.  So if you want to get a bit more deeply into now to use a “Gussied-Up” GSR, instead of a naked GSR, THE REAL ANSWER,  get the full story on my blog: http://www.denaliguidesummit.blogspot.com/  where we start on how to actually use GSR data to your advantage.  -> ET TU BRUTE ? By Denali Guide

http://denaliguidesummit.blogspot.ca

To the the charts involved, go here, to my Public Stock Charts Portfolio, and go to the last section.  All charts update automatically. http://stockcharts.com/public/1398475/tenpp/1

© 2016 Copyright Denali Guide - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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