My rather retarded "system" for gold - watch the 50sma and buy when it crosses above the 50 (for at least a day) when the 50 is flat or rising, else short when it rises to a falling 50sma from beneath, appears to work despite whatever manipulation is going on. This system also (in backtesting) seems to work about as well for silver.
Gold is approaching the down-sloping 50 rather rapidly, and if it gets closer and starts down again, I'll short again (on paper, the stack is another issue). This hedges the stack pretty well, and at the end (support - we hope), I can buy more to stack with the profits from the short (I often do). DCA with a vengeance, with timing to get the best cost basis possible.
I went crazy-long paper silver last week. It seems to have a little longer to run before hitting the falling 50sma, but not a heck of a lot - and the profits are already getting into the "too good to be true, run!" area in just a few days. Again, if it bounces off, like it always seems to do - a falling 50 in either one seems to act as resistance - out I go from the long, and back into short perhaps. Same game, it works, it makes you money, and that can all go to phys if you're so inclined.
Not only that - more than half the time, you're out completely - and that money can be working on some other trade. Or just sitting in something more risk-free. Being out means the risk-reward is greater, since the risk is less if you're in less of the time. (talking paper here, again, a stack is a stack, another approach entirely).
Talking to a master-trader friend on G+ the other day, we discussed the importance of diversification (not de-worseification, which we agree on too) in TIME as well as in asset class. That's what my system does for you. The stack is "forever", in effect - one end of that spectrum. The paper trades...the other end, might be only a few days at a time, or a few weeks. Both work, in different ways. Since the paper trades are short-term - the risk associated with one day people realizing the paper is total junk is lessened - because you're mostly either not in it at all, or short it - in which case that "risk" turns in your favor in a *big* way. And if the "worst" happens in paper - I see the decoupling between the physical price and the paper price, as physical will still be worth something - probably much more - even if the ETFs or the futures biz go bankrupt or are otherwise totally discredited.
Really, as manipulation goes, we might all whine about it going on in gold and silver, but compared to penny stocks and bitcoin-class stuff - it's nothing, it's slow (so you don't have to be an HFT'er to do well), and the percentage moves are smaller. It's an easy, low-risk trade as these things go, frankly, since the effective "market cap" means even the big boys can only affect it so much, whereas even *I* can push the prices of small things (penny stocks, bitcoins and so on) around personally. Which means the universe of other manipulators is far larger and less predictable (and not so protected by .gov cronies either) - harder to trade for profit reliably, in other words. At least if you have the morality not to be a manipulator yourself (eg, me).
Look - anytime you play poker, there are some "sandbaggers and cheats". That doesn't mean you have to refuse to sit at the table. You just have to be better at it than they are, to win (edit - or sense when to get up before they spring their trap). In some cases, you can't be better at it - they might forget the rules and just pull a gun on ya, or be so good at cheating you can't see the cards coming out of the sleeve. Those games I don't sit at the table for, but this isn't quite that sort of game - the PM's are BIG...there's much more danger playing in a small hick town as a stranger (eg penny stocks and the like) where a stranger won't be missed...should something nasty happen to him.
Now, I don't play flakey new tech or other things, as I'm a techie and "know too much" - it would have had me backing betamax instead of VHS, for example. And they swing too much for no apparent reason, psychological or other, for it to be anything but roulette for me. I prefer poker or chess - there I have a chance, an edge. At pure gambling, the house vig gets me every time.
