SIlver And Gold Get Pounded

Today both silver and gold sold off rather sharply on heavy volume. I was long SLV and GLD and got stopped out today at a loss. On the open my sell stop in SLV got hit at 126 and shortly after that I got stopped out of GLD...I lost on both of these trades.

If there is one thing that can be learned from this trade, it is the importance of using stops. Ever since I put these trades on I've been posting charts which showed where my protective stops were placed. I got stopped out of SLV right on the open for a 5 dollar loss from my entry price. If I didn't have a stop placed or if I waited until the close, I would have lost twice as much. I could have lost 10 dollars on this trade but because I had my stops placed well in advance, I took a loss of 5 dollars which I can live with.

I think today is a great example of why stops must be used and actually placed in the market. Don't ever use mental stops unless you are playing with mental money!