Forecast - 2012-12-20

I had posted on December 6th about the possibility of Cup and Handle pattern for EURUSD pair.
One thing that I missed is that the rebound happened around 50% fibo, not 38.2% as I had predicted.
But the whole scenario seems right, EUR is moving up to the highest level since April 2012. Cup and Handle pattern happened perfectly.

I also mentioned in that post, if gold broke the purple support (which it did), it might go to 1665-1675 area. And that also happens right now.

The question is, how deep will gold go south?
To get the big picture, I will have to use daily chart. Look at the chart below

The first support for this time is the white line support, which has been acting as the support lines from May 16th, 2012 . This line seems quite solid for me. Just look at how many times it supported the price (white small arrows). Most likely in my opinion, this white line will be the limit of this downtrend.
But if gold breaks this support, we still have the second support around 1630 area. Just look how strong that line (area) as the support and also resistance from Mar 14th, 2012. This line seems even stronger than the white line.

Look at another zoom-in daily chart below.

In my opinion, the intersection area between the white line and the brown line will be a good buying area IF gold ever drop that far.

My conclusion, gold is going to have a strong support. Let's see if it can hold or it will also be broken.

Trade well.

GG - 2012.12.20

Interesting Link

Instead of making a forecast or review, I would like to specially put this link in this post:

http://nicoomer.blog.kontan.co.id/2012/12/13/apalagi-yang-anda-tunggu-bagian-2/?utm_source=Jumat%2C+14+Desember+2012&utm_campaign=Kontan+Newsletter&utm_medium=email

This is a very interesting reading with supportive logical and strong arguments.
Since this is the link to the second part of the original author's post, please look for the first part by your self and read that (I recommend to do it).

Good luck.

GG - 2012.12.18

Forecast - 2012.12.18

Gold had dropped down on Dec 13th significantly. I didn't know what the reasons were because USD did not go up. Other pairs also didn't drop like XAU.

It seems that the purple support is more confirmed as the new main trend support because it seems that market respects that purple line and gold bounced back exactly at that line.
After forming a hammer in H4 Chart, gold continue to strengthen until this moment.
If gold can break up the purple resistance and continue to play in the upper side of the purple line, I think there will be a bigger chance for gold to be bullish for closing its price this year.
But if gold goes back downside and enter the previous path (between the purple lines) than there more likely gold will be closed under 1700 for this year.

Trade well

GG - 2012.12.18

Forecast - 2012.12.13

It is now about 45 minutes after FOMC statement.
(Note: the number 3:44:24 is the time left for that 4 hour candle to finish. Means the red candle just run 15 minutes and 36 seconds)
Just exactly as the news predicted, The Fed is extending Operation Twist program which spend $45B a month. It means we don't have any change as current situation. The Fed is spend a total $85B/month for its program.
I guess gold will strengthen but not too much. We have so many resistance above 1730. So, I will not expect too much now for an uptrend.

Seeing at the H4 Chart, 45 minutes after FOMC, it's clearly seen that gold has strengthen to 1723.25  but then has correction in the next candle. From those 2 last candles, which represents 45 minutes after announcement, I think it  gives us a clear view that FOMC announcement doesn't have much effect on gold price.

 Also note the volume when FOMC announcement. There was not big, just as ordinary as other moments. That gives me a picture that market consider the FOMC as an ordinary event, nothing special about it.
 I guess gold will play between my white line and the yellow line (about 1709-1726) for today with a slight upside tendency.

Trade well....

GG - 2012.12.13

Forecast - 2012.12.12

Gold still move around the white line, mostly above the white line. It tried to go lower but failed, indicated that the bear didn't have enough power to push gold lower.
In the other hand, the bull seems also don't have power to push gold higher yet.
I think the market is still waiting for FOMC announcement later tonight (my time) and I'm sure that the price will move significantly at that moment.
If we put the news into account, I believe gold probably will go higher at FOMC announcement because there is a big probability that the fed will announce additional easing to extend the operation twist that will be expired this month. If the fed do that, I believe gold will go higher, and more likely will break my yellow resistance. My expectation area for this scenario is 1730-1750 area.
But if there is no operation twist extension, I think gold will break low, and if it can break both my support, I think it can go to 1675 area. But I doubt gold can go lower than that.
In my opinion, gold will move to both sides (up and down) in a big volatility first before going to the certain direction. So, don't put your SL too close.

Trade well

GG - 2012.12.12

Forecast - 2012.12.11

As predicted in the last posting, the bearish seemed already diminished, at least temporarily.
The very good NFP last Friday might only showed a "fake" truth about US economic conditions, that what I guess what the market considered about that NFP data.
This is may be one of the explanation of why gold couldn't go lower: http://business.time.com/2012/12/07/the-bad-news-behind-the-good-jobs-numbers/

As seen in my H4 Chart above, gold had broken my purple resistance (1) and the white resistance (2) very "easily" in one pass only, but has a correction at the moment. I noted that the move upside happened even after the "good" NFP data. That was unusual at "green" US data and that meant something for me, especially in a strong downtrend path.

I think gold will still stay above the white line for the moment, but I'm also not sure it will go higher in the short term. At most, I think it will be restrained below the yellow line (my resistance from daily chart) because I don't see any strong reason for gold to go higher today.

On the other side, I think gold will not go lower than 1698 for this short term, at least until FOMC.
Most likely it will stay above the purple line (around 1702-1703).

A note about FOMC: I get a feeling FOMC will make gold move to the upperside IF the issue about new bond buying program is announced for January 2013. Let's wait and see...

Trade well

GG - 2012.12.11

Forecast - 2012.12.07

Just as expected, NFP gave a high volatility today.
Gold still moved in the green path before NFP and then broke up right after NFP.
It was really unexpected move since the NFP data was very good for USD (really green, see attached picture above).
Maybe it's too early to say, but that move gave me an impression that bearish mode is almost over.
With very good NFP (64% more than predicted), gold should drop much lower than that. At least, it shouldn't go upside that quick.
I don't know what is the reason, but this is an abnormal reaction of the market. Anyone must trade with cautions. Even more we are facing the end of the year when many traders will be off from the market and the volume will decrease significantly. In that kind of situation, usually little volume can make high volatility. Better be more cautious.

My personal opinion is still bullish for 2013. The last data that I wanna wait and see is the FOMC meeting next week. It may give a significant direction since this is the last FOMC meeting before 2013, when the fiscal cliff will go or not go.


For the short term:
Looking at the 4H chart above, I guess gold will begin sideways between the purple lines.
Gold needs to break the white line to be considered as bullish mode.
In other scenario, gold must break the purple support at the bottom to be considered as bearish mode.
The move between the purple lines will be considered as sideways, as the most likely scenario for me at this moment.

One more additional note from me:
I read comments from many traders in FF site. I think it is not logical to say that QE will be stopped in this short time. Why? It's very clear that the economy crisis is far from over yet and stopping the QE at this time will make a worse condition in a sudden and damage the recovery that begin (?) to develop now. We are still in an uncertainty at this moment and printing more money seems to be the only solution for many countries. So as long as the governments of those countries can't find another solution for the crisis, QE will not stop earlier than those other countries's money printing.

I still believe that QE will run at least until the second half of 2013 and won't be stopped just because one or two months good data. Only time can tell....

Trade well....

GG - 2012.12.07

Update - 2012-12-06

Usually I never post an update only few minutes than my forecast. And the most unusual for me is I never post other chart but gold.
But especially for this update, I make an exception. I can't help not to include comment this E/U chart.
It almost pretty clear that I can see a Cup and Handle pattern in this H4 E/U chart. I think most likely we will have a correction for E/U to its 38.2% fibo.

But this is not the only reason I want to comment about E/U chart.
Usually, E/U and gold have a positive correlation, which means, if E/U up then gold will also up and vice versa. But if you really notice, since Nov 26 (almost 2 weeks) we have seen that E/U and gold have a negative correlation. We can see that when E/U continue to go up from Nov 26, but gold went all the way down. I don't know what is the reason and until when it will be like that, but I think this won't be long since both has USD as their pairs.

As we have seen that Dollar Index is going down, then we can assume that the abnormal move is from the gold side. Eur reacts normally. If USD go down Eur should go up. And that's what gold should be normally, but it didn't. USD weaken and gold also weaken. This won't be forever. I guess gold should react normally soon.

One more interesting from H4 gold chart above is, it still respects the green path.
Look at the last candle. Gold move up so strong but stop exactly at my green path resistance and go back down to the yellow line.
I still stand by my opinion, that if gold can hold its position not lower than the purple line until the closing market this week, more likely we will have a sideways with slightly upside tendency as my last post.
But if gold can break the purple line, we may have a bearish up to 1665-1675 area.

Good luck.

GG - 2012.12.06

Forecast - 2012.12.06

Until tonight (my time) when I make this posting, gold is still playing between my green path.
It seems that gold can't go lower this whole day and beginning to strengthen a bit.
Although yesterday it tried to break the green path support, but it went back in the same 4 hours candle and make a higher low in the following candles. I think gold is making a new support line (the purple line).
If gold can stay above the purple line until this week closing market, I think this is the lowest area gold can go down.
Actually I'm thinking that it is making a new sideways at this moment between my purple support and my lower yellow line (faded arrow). The most is the sideways between the purple and the white line. At least until NFP tomorrow.
Yes, there's a big chance of high volatility when NFP announced on Friday.
So, strict to the MM and trade well....

GG - 2012.12.06

Forecast - 2012.12.05

Gold continue to slide down and seems to follow my green path. It already breaks the white support of its last main uptrend and also breaks its yellow support.
Looking the fact that even the bad US data could not push the gold up, I guess gold will try to break down the green support. If it succeed than it is big possibility that it will go to 1670-1675 area.
But always be careful. Although it seems that the bear is so powerful at the moment, a significant surprise may boost the gold upside suddenly just as last upside move when Obama won the election.
Until this moment, I still see gold will not move lower than 1670-1675 area.
Upside scenario: As long as gold can't break the white line, I can't consider we have uptrend yet.

Good luck...

GG - 2012.12.05

Forecast - 2012.12.04

Gold has broken its Main Trend support (white line) today but was able to bounce up at its last support (yellow line) at 1698.
Looking at its move this two last days, it seems that gold is making a sideways with tendency slightly downside.
I guess gold will move in a really narrow downside path (green path) and should break either downside or upside tonight (my time).
Gold must break yellow support (1698) and green line support to confirm its downtrend. If that happens, there's a big possibility we will have 1674-1698 area for the following days.
For the upside scenario, gold must go to the upper side of the White line first. If that happens, I think gold will play between the white support and yellow resistance only and making another sideways.
The most likely in my opinion, gold still moves between the yellow R/S.

Trade well....

GG - 2012.12.04

Forecast - 2012.12.03

Gold market seems to have many surprises in the last week.
When it seemed to be a confirmed uptrend, it suddenly dropped back to the south and now gold is testing its Main Uptrend Support.

From the H4 chart above, we can see that gold had a significant drop last Friday, but was able to make a pull back a little bit to the north at closing time.
This is a very interesting condition since we can see that gold has a significant bear power that push to the support area, but in the other hand, we also have a perfect doji in our 4H chart from the last week closing. More likely it will form a morning star.
If we have a confirmation of morning star from the first H4 chart candle in the opening market in Monday (just few hours from now), technically gold should go north.
Personally, I expect gold will go north on Monday although I can't say to what level yet. This is because I see gold still respects its support area and always make a rebound when touching that white support line (see the chart).

If we look to fibo line, we can see that we also have the 61.8% around the white support area.
It makes the1704-1707 area become a stronger support.
And with the possibility of the morning star (doji) from the last 4H candle, I believe it is reasonable to predict that we will have an upside move, at least for the opening market. If that happen, I expect gold only can go at most to 1730 area, not higher.

For the downside scenario:
If the bears can break 1703, there's big possibility we will have 16xx. But I believe it will not lower than 1672.

Since in the week ahead we are going to have many big impact news, just keep your MM tight.
Remember, we have seen many surprises in the last week. And believe me, those would not be the last ones.

GG - 2012.12.03

Update - 2012.11.29

Exactly as predicted in my last post, gold made sideways in the blue box area until NY open.
Going higher a bit after NY open and play around 38.2 fibo.

For My Personal Notes:
Today fundamentals (US News):
GDP and Unemployment Claims (almost the same as predicted)
Pending Home Sales (very good / green, +5.2 < +0.9 < +0.4 = real < predicted < last)

Analysis:
It's very logic if GDP and Unemployment didn't give any effect because the result just almost the same as predicted.
But Pending Home Sales was very good (green), almost 6 times than predicted, and should push gold much lower than that. Actually we didn't see it. Gold even seems to go north.
I smell bullish in the air.

For My Personal Notes:
Still can't get any convincing of what might cause the drop.
Some possible causes:
1.  India gold demand down ( http://m.indianexpress.com/news/%22indias-gold-demand-may-dip-by-33--at-700-tonne-in-2012-wgc%22/989113/)
2. Sell order 7500 x 100 troy ounce or 24 tons physical gold sold (rumors, don't have link to these)
3. Obama speech about tax cut (may be not since he speech after the drop has started)
4. Warren Buffet on tv about Fiscal Cliff (I don't think so)

Sorry to all readers,
I have to put the above note in this post since it is also my personal log.

Now let's talk about the chart.
Seeing that gold is still hiking although there is a very good Pending Home Sales data just now, I think the bull is back again. It is very obvious that bull wants to make a compensation of what bear has done with that deep drop. Looking at my H1 Chart, it is very clear gold can pass 23.6 fibo very easily (arrow 1) and pushed back down just 1 time only (arrow 2) and now it seems it is playing around 38.2 fibo and start trying to break its 50% fibo.
I believe it will not that easy for gold going up to its position before the drop. Need more time.
I think tomorrow gold will play between 1720-1735, still sideways with a slight tendency of going up (as long as there is no other surprises)

GG - 2012.11.29

Forecast - 2012.11.29

Hi everyone,
Being curious of what the cause for these two last surprises, I am still not getting any convincing explanation.
I feel bad about it since one of the lesson I got long ago from an expert, say that if I got an unexpected move out of technical I had have predicted before, that it would be my "must-do" homework to search for the cause and add that to my experiences library. But, for these case, I'm not getting anything yet.

Okay, let's skip that for later. It's better we focus on the chart.
As in my 3rd Update (last post), I predicted gold will make some sideways first at 1716-1723 area (blue box). If we look at M15 chart, I have strong feeling that up to NY open, it is more likely gold will make sideways with at most 23.8% as the lower limit and 50% as the upper limit. I have strong feeling it will make even a more narrow path of sideways IF there is no unscheduled surprises. Even more, I'm hoping there's a scalping path for today. Let's see...

Good luck and trade well

GG - 2012.11.29

3rd Update - 2012.11.28

This is for the final update of date 2012.11.28 even though it's already Nov 29 (my time)

The last candle in my 4H chart shows that bear power has diminished. Even though it go back downside once more, I think  the 50% fibo will hold that. and if it breaks that fibo support, there are still the main uptrend support (white line) and the 61.8% fibo line. Beyond that we will see 16xx area. Hard to believe it would happen, but as we already seen, surprises happened. So, just keep on your MM strictly.

Technically, I see gold will have 1713 - 1735 as its playground for a while. More likely it will begin a sideways around 1716-1723 first. Let's see....

Well trade friends....

GG - 2012.11.29

2nd Update - 2012.11.28

Haven't got a chance to put my briefcase in its place when I step into the house, I shocked seeing gold dropped that far.
Running over to my computer, looking for what news made this happened, I couldn't find anything big.
This is the second time in only a week that we have this phenomena. This is also why I always say many times in my post that SURPRISES HAPPEN.
I dare to bet for anything, no one in the world know when this would happen. This is beyond any technical.
The bears has pushed the price gone to the very base of its support, The Main Uptrend Support. I should say that this is the last support gold has, and if it is broken then it is not impossible we are seeing 16xx again.
But looking at the gold move when I make this post, I think this should be the farthest spot where the bear can go today. I doubt it will go much lower although I'm not so sure anymore because we already had 2 surprises in only 5 last days. Even until now, I still don't know which fundamentals cause these last two surprises.
If gold can move back higher than 1718, then I believe it will play between 1720-1730.
As usual, the very important thing is, strict to your MM.

Good luck...

PS: when I'm almost posting this, I notice that gold is beginning to form a "possible" morning star in that last candle in H4 chart. But it still 2 hours and 7 minutes to go before the candle is fully end its 4 hours duration. If that truly form a morning star, then technically we are going to have a rise back in gold price. Let's see...

GG - 2012.11.28

Update - 2012.11.28

Today gold is still playing in my blue box as I predicted in the morning post.
I'm still seeing that the bear power is still not too big, and it is only some consolidation moves for gold to go up and break the resistances area (see my posts before).
Unless it breaks lower than 1734 (50% fibo), I will not consider gold in bearish mode yet.
If it breaks down, I expect it will not go lower than 1720.
In the other hand, if gold can't break that support area (1735-1738) until NY close, I think we can expect another north trip to 1750 area but not breaking the Main Uptrend Resistance yet today.

Let's wait and see since there's still some big impact news has not come out yet.

Trade safe and well...

GG - 2012.11.28

Forecast - 2011.11.28

It seems that gold delay its uptrend move and would like try to test its new path support first. After having almost 2 days narrow sideways, gold tends to go lower a little bit to its support area.
From the H4 chart and my indicators, gold  is showing an intention to go lower and now is already around its new path support (purple - 1).
I think gold will not break lower than 1735, since we have 3 supports there and seems the gold move doesn't have strong power. With all the good news (green) for USD yesterday but still can't push gold much lower, I still think there will not be any deep correction. But please always be careful since surprises happen.

Zooming to my M15 Chart, in my point of view, probably gold will only play inside my blue box, which is between 1738 - 1745.5.

Or at most for the downside scenario in this morning to London open, maybe it will go a bit lower to its support area between 1735 (which is also the 38.2 fibo) - 1738. This area was the resistance area which now automatically has to be the support area.
For the upside scenario, I think it is not today for gold to break the resistance at 1753.5.
We are not seeing scheduled big impact fundamentals for today that can move gold much, except later when US market already open. So, I think its better turning off the screen and get some fresh air rather than seeing a "dead-man pulsation" whole day long....

Good luck....

GG 2012.11.28

How I Trade Gold - 2011.11.27

It's been a boring time to watch a "dead-man" chart like these last two days.
It seems as if the whole market in the world is having holiday in the same time. Even scalping is hardly done in such price!!! OMG, where's the market mover??

Okay then, I think today I will not post a prediction but use this occasion to post my experience and how I do my trade in gold market.

I always say that I'm bullish for gold in long term. in other words I say  Gold is always rising.

Of course it doesn't mean without any correction. There are corrections, sometimes real deep correction, but what I mean here is, the price of gold will always rise in the long term.

"Gold production and underground gold reserves: 
In 2009 and 2010 world gold production stood at 2,450 and resp. 2,500 tonnes. It is estimated by the U.S. Geological Survey that the world still has gold resources of 51,000 tonnes, with 33,000 tonnes identified and the remaining 18,000 tonnes as undiscovered resources. Thus, with the current annual mining volume, underground gold reserves would last for 20 years."
source: http://goldratefortoday.org/benefits-gold-finite-resource/

Even if we don't count recent economic situation, the world will face a rising price of gold as the result of the lack of supply versus the growing demand (since population is growing, demand is also rising). This is very logic, there's no other substitution for gold function known until this day.

Even oil will have a replacement soon. Although it will not be quick enough because oil business is a very gigantic and involved many super rich people and many powerful countries so it will not that easy when dealing with politics and powerful background. Not to tell how much needed to change the infrastructure for the new type of energy, but we already have a significant clue about the end of the fossils fuels. I think most of us who read my post here will see that oil price will come to zero in his lifetime. This is one article that very interesting to read and as proof that oil era will be diminished soon. (sorry, this article is in Indonesian language. Just use Google translate to read that in English) http://id.berita.yahoo.com/jet-berbahan-bakar-nabati-pertama-tinggal-landas-di-020407418.html
So, what do you think of gold? Something which is depleting but maybe will never have a substitution and the other hand facing the increasing demand?

Now, let's add all the situations we have nowadays.
Today, we have the "irrational" amount of fiat money (in paper, account, check form etc) than we have in history. All big countries such as USA, UK, Japan, Europe countries are adding more fiat money in gigantic amount. Logically, this all fiat money should have underlying assets that warranty its existence. Yes I know, this underlying assets are not only gold, there may be stocks, economy status, capability of government to pay their debt, bonds, property, lands, business, and there are still many that can be named here. 
But still GOLD is the most liquid and trusted, and also the most valuable which value will never reduced by anything.
I'll give you the examples. Companies can be bankrupt, the payment of mature bonds can be failed, the stocks can be broke, property although seems more valuable amongst the other but is not liquid and the value may reduce in crisis time. But what is happening to gold? No. It still the best amongst of all. 

I still have many to tell about gold, technical or fundamental, that shows gold MUST go up. But I think I will not discuss it here, because it is not my main topic. If you want to know, just googling. There's so many sites you can find that will tell you the facts.

Now, back to our discussion about how I trade.
Just try to get into my mind. What if you were me. What would you do with all this facts that you see and have a bold confidence about where the price is heading?
Yup... Actually I don't even need to explain anything, you already know the answer, right?
Such knowledge and convidence about gold influence my style of trading.
I prefer to open Buy Positions rather than Sell. I think if I have wrong Buy position, sooner or later, the market will pick up my position. But if I have wrong Sell position, it could be a "disaster".

Actually I have some levels of trading gold, sort by the safest to the riskiest one:

1. Invest in gold physically
This is an old fashion way to make fortune of gold but the safest one. This is what our ancestors do to store their wealth. I do it also but not too much.
Suppose that you have fund of USD1.000 which you allocate for investing gold.. You can buy gold about 0.5714 oz at price, let's say $1,750 now.
Let's say gold will rise later to $1,900, then you will have profit as follow:
= 0,5714 x ($1.900 - $1.750) = $ 85.71

2. Invest gold using leverage but don't trade it
Instead of buying gold physically, try to invest it in leverage trading. To do this, we have to secure our investment because we are not holding the physic of the gold. We only have an account in the broker, right? So do these steps:

• Make a due diligence of your chosen broker before investing. The bigger the broker the safer your investment would be.
• Prepare how much idle fund you will put in your investment. Remember, IDLE FUND, not the fund you need for daily use because this fund will be placed in your account for some time.
• Define what is the worst price you believe gold will have correction. Let's say you believe gold will not go lower than $ 1.550 / troy ounce. And let's say the current price is $1.750 which also the price assumed as your buying price. It means that you have to prepare your margin endurance to hold your position if it turns out that gold price is going down after you open buy position at $1.750.

Just note these:
1 Regular Lot size = 100 troy ounce, you will have $100 profit/loss for each $1 change of gold price.
1 Mini Lot size = 10 troy ounce, you will have $10 of profit/loss for each $1 change of gold price.
1 Micro Lot size = 1 troy ounce, you will have $1 of profit/loss for each $1 change of gold price.

For example of this scenario, let's assume you also have $1.000 capital to invest. The calculation will be as follow:
$1.000 / ($1.750 - $1.550) = $5, which means, for every $1 change of gold price you have to hold $5 loss.
So, if the price go $200 lower, you will loss all your $1.000 capital.
Now with the $5 to spend (or gain) for each $1 price change, it means you can buy at maximum 5 MICRO lots of gold which equal to 5 troy ounces of gold.
Assume that you are right, and gold rises to $1.900, then you will have profit:
5 micro lot x ($1.900 - $1750) = $750 (compare this result to physical investment with the same capital)

3. Trade the gold using leverage
I have to remind you that this is the riskiest level. It means you already enter a trading environment and to do this right, you must have ability and knowledge of being a trader. Start with demo account please.
It is almost the same with my number 2 above. But usually I lift up the lot size because in this trading type, I will make cut losses. Basically, I will allocate 5 to 10 times of my investing lot size for my scalping. The logic is, it is easier to get small pips rather than big pips but it also yields a small profit from small pips. To compensate this, put more lot size. But remember that it could become big losses too.
So, I will only do this when I believe there is a scalping path in the market (see my other posts about my scalping path).
Usually, I also limit my total lot size so that it will not exceed at least my $100 margin endurance. For example, if now the gold price at $1.750, then I have to be able to hold the floating loss at least until gold reach $1.650. But of, course I rarely have to wait until that level because usually I dump my loss position at a little bit lower than a certain strong support (in my opinion) if I believe price will go much lower. Compensating it in the bottom by open buy positions and not sell. If I feel that I can hold my position and believe that the price will be back, I will hold it all.

By trading gold with leverage, you will maximize your profit but also increase your risks.

In Conclusions:
I'm not using the standard MM and RR ratio. This standard rules of, saying 2% risk for each position you open, can be learned from the web. Just googling it.
I'm using my own MM and RR ratio that I adjust to suit my trading style. This is very personal and I don't recommend anyone to just use it as I used to because we may react in different way when facing the loss scenario.
Just make your own rule that suit your trading style, and stick to it.

Good luck....

GG - 2012.11.27