Originally posted at forexfactory on May 6, 2011:
I dunno man, that John Paulson guy says its going to $4,000. Hes betting like half his net worth on that one trade. If he says it, it must be true.
Ohh but wait, I’m an order flow trader so I need to think in terms of order flow and not some magical ramblings of a top hedge fund manager.
He’s already fully invested into gold. He can’t generate anymore bullish order flow. His statement that gold is going to $4,000 is not going to generate any bullish order flow. So that means he is relying on other market participants to push gold to $4,000. Umm, I wonder which market participants are going to generate the necessary order flow. Umm, I wonder what scenario he thinks is going to play out. Umm, I wonder what his pain tolerance point is. Umm, I wonder where his stops are.
So very interesting…Â