When market conditions are as they are right now it is really tempting to try and predict the top. But please don't and here is why.
If you'd look at the gold chart right now you'd see that it has been running up all year long with a slight consolidation in the summer. At any moment this year it could have been "the top", but it wasn't. What I am pointing at is that the R:R of predicting the top when you are at the all time highs is unfavourable to say the least. Even if you would've been able to predict a throwback it would've been minor when comparing with the whole of the swing.
Now technical analysis is great and all but at all times in history there were some assets that were absolutely sentiment driven and you can squiggle what ever lines you want on that pretty colourful chart. It will not help you but give you false expectations of cracking the matrix. Market sentiment is like rabies - nobody knows whats going on and then sudden death. Now we have precious metals booming, it was A.I. before that, and EV's before that, and tech before that and so on and on and on. So when you're doing TA on a sentiment driven asset that is currently at all time highs it is only natural that the only thing you will look for is the top and in such matter you will become liquidity.
When what ever you are looking at is in price discovery mode you literally have no price history to look at. So tell me? What is you point of reference? People who work with fundamentals here have a greater edge because they don't even need to look at the chart to understand that we are in a territory that is volatile and pricing in a premium, but when you don't see the sticks forming you don't think about tops, you play the waiting game. Of course at some point in time the price will drop, but it will not be because of a fibonacci projection or a double top, or any other kind of TA pattern, at least not in this sentiment driven asset like gold. It will be because of two things - smart money exiting their positions and a change in sentiment. And for both of these to happen you need news and macro events to stir up the pot and to have someone or something to blame for the dips that are yet to come.
All in all, regarding "catching the top" - don't. It is gambling unless you have many and many years of experience trading in the markets at all time highs and probably the people that do have the so much needed experience will agree with me.
Trade smart, don't be liquidity.
If you'd look at the gold chart right now you'd see that it has been running up all year long with a slight consolidation in the summer. At any moment this year it could have been "the top", but it wasn't. What I am pointing at is that the R:R of predicting the top when you are at the all time highs is unfavourable to say the least. Even if you would've been able to predict a throwback it would've been minor when comparing with the whole of the swing.
Now technical analysis is great and all but at all times in history there were some assets that were absolutely sentiment driven and you can squiggle what ever lines you want on that pretty colourful chart. It will not help you but give you false expectations of cracking the matrix. Market sentiment is like rabies - nobody knows whats going on and then sudden death. Now we have precious metals booming, it was A.I. before that, and EV's before that, and tech before that and so on and on and on. So when you're doing TA on a sentiment driven asset that is currently at all time highs it is only natural that the only thing you will look for is the top and in such matter you will become liquidity.
When what ever you are looking at is in price discovery mode you literally have no price history to look at. So tell me? What is you point of reference? People who work with fundamentals here have a greater edge because they don't even need to look at the chart to understand that we are in a territory that is volatile and pricing in a premium, but when you don't see the sticks forming you don't think about tops, you play the waiting game. Of course at some point in time the price will drop, but it will not be because of a fibonacci projection or a double top, or any other kind of TA pattern, at least not in this sentiment driven asset like gold. It will be because of two things - smart money exiting their positions and a change in sentiment. And for both of these to happen you need news and macro events to stir up the pot and to have someone or something to blame for the dips that are yet to come.
All in all, regarding "catching the top" - don't. It is gambling unless you have many and many years of experience trading in the markets at all time highs and probably the people that do have the so much needed experience will agree with me.
Trade smart, don't be liquidity.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.