Strategy Description: More or less the exact opposite of the trade yesterday about the big move in underlying and expecting the ETF to play catchup.
In this case NUGT was straight up about 1ATR while gold was only up a little and without any sign of a catalyst. It is important to realise a couple of things on this trade:
(1) You never want to have too much size on an etf like this when it's going against you, start in at very picky prices and wait until risk is defined then get full size. You can see from the chart it's pretty obvious when it finally breaks trend.
(2) Unless looking for a bigger picture reversal for some reason it is a scalp against the predominant trend; and therefore should have realistic targets. E.G a 50% retracement or vwap or something. Scale out because you don't know where the trend will begin again.
In this case NUGT opened with a big rally and moved just under an ATR (ATR=6.50ish) and moved to a high of $4.50 pretty quick smart while gold was only up $4. The most important thing to realise is that it's important that it's not grinding up but rather that it's moving up quite quickly and is due for a break or consolidation before continuing higher.
Begin into 1/4 by providing liquidity and anticipating the spot. Try get some of that covered on the first pull, and then add (being quite picky on prices) on the lower high. Using the EMA's as an indication for trend can be useful. You can see that after the break of trend it rallied right back to near the high, so being picky rather than chasing with the adds paid off.
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