"As always thank you (and Eoin) for the great service and dedication you give to your subscribers! I don't get to read comment of day nearly as much as I would like to but having three young children (the youngest just one month old and the eldest two and three quarters) the demands are clear to see! However I have a question for you!

"As we know trading and investing is a psychological game and to me always seems easier from the sidelines than actually participating. Although obviously not nearly as much fun! What I mean is that I can clearly see what is happening technically and what I should be doing but when it comes to it I struggle at certain stages.

"A case in point has been the Gold rally. I have been with you shoulder to shoulder believing that Gold would find support at the levels it has and that it was more and more inevitable that a breakout to the upside was going to happen and that would give way to a lasting rally and probably to new highs. We even have the fundamentals with us, with all the money printing, going into a good seasonal period etc. etc.

"However the "Hypothesis" as you called it took some time and it required staying power and a few looks in the mirror on the down days and consternation on days the breakout could have happened but didn't! This is the wall of worry I suppose and I can cope with that! When the breakout finally happens I get too excited and too fearful that the whole trend will immediately reverse and all the hard work will prove to be for nothing. This is going through my mind, so I start to nibble at profits and then on the next big leg up it gets a little overbought and so more profit is taken! Until I end up with a small position and think, well might as well take it off the table. So at the very point I should be experiencing great relief that the breakout has gone our way and all the battles and scars have been worth it, I get incredibly scared that all the profit will disappear! At the very moment I should be adding I am taking away……."

David Fuller's view Thank you for a wonderful, perceptive, honest and therefore instructive email. There is not a trader or investor out there who has not gone through similar experiences, often many times. You speak for all of us, although not everyone will have your insights and ability to self-analyse.

Inevitably, trading or investment seems easier from the sidelines than when actually participating. Once we enter the market, the pressures increase and our ability to remain objective is challenged. One of your advantages is that you already know that successful trading and investing is often a psychological game of trying to anticipate what the crowd is going to do next. Some people, who are more challenged, think it is all about the economy.

I hope that you will not beat yourself up over your recent experience because that would not help the learning process, which never really ends for successful participants in the markets. Also, it was a successful trade in that you were on the right side of the trend as the breakout occurred, even if you did not maximise your potential. I suggest that you make a habit of asking yourself: How can I do a little better next time? You are most likely to find the answer from within.

Others were not so fortunate in gold. The prior trading range between mid-May and mid-August demonstrated disagreement, leading to a 3-month standoff between buyers and sellers. Some of them would have opened short positions because many commentators were predicting a downward break. Having made the wrong bet, they have greater cause for angst.

In the Congestion Area Analysis portion of The Chart Seminar, we discuss why markets often surge following a successful breakout. Briefly, disagreement is resolved as the breakout occurs, resulting in a period of one-way traffic in the market.

We all carry baggage from our prior experiences. The consternation, tedium and disappointment in waiting for the eventual breakout is stressful, leading to further uncertainty, even when the market eventually does what you had positioned yourself for. Moreover, all the ranging of the last few years adds to uncertainty which makes us more cautious.

Rather than anticipating the breakout, some people prefer to wait for it and then jump in. However that is no panacea because if the breakout is not sustained they have entered near the upper side of the range. Also, if the eventual breakout is strong, as we have recently seen with precious metals, many traders will wait for a pullback, making this prospect less likely. They may have to pay up in order to get on board, hoping that the move will continue.

Personally, I prefer to be early if there is a clear fundamental and particularly technical case to be made for either a breakout or overdue reaction in either direction. Under these circumstances it is usually advisable to build a position incrementally. That was my strategy for precious metals during the dog days of summer. I am more likely to wait for breakouts before leveraging up in established trends because the additional move usually justifies somewhat higher trailing stops for initial positions.

Trading is hard work, as I often say, although very rewarding when one has the luck of the big trend and then gets the tactics right. Even the best traders will often be wrong more often than they are right, subject to market conditions. But one good run will more than make up for some smaller mistakes.

During the last few months I lost some seed capital while waiting for the precious metals recovery. When trading, I sometimes feel like a lumbering boxer, waiting for an opening that I can exploit. And even a good trend can feel like riding the tiger, as some of us experienced with volatile silver today. And when it all seems too easy, rather than mistaking a bull market for brains, we should tighten stops and / or reduce positions, remembering that trend accelerations are unsustainable.