Gold - Trade setups to avoid
We have been posting potential bullish trading signals on Gold and the ways in which to enter this trending market of late, as the probability for these has been very high.
Now, the market doesn't trend in a straight line, so when we saw the price in Gold make its way to the $1900.00 level we looked to see if we could get any confirmation selling signals for a potential profit taking opportunity.
Its easy for anyone to show profitable trades but we believe that showing examples of why you wouldn't take a trade or what to look for to avoid a potential losing trade is just as important.
As you can see from the 15 Minute chart, price started to form a bearish selling 3 drive pattern at the highs just above the 1900 level. When we saw the 3rd and final drive high reject a little lower this sparked our interest.
With any price pattern we look to trade we don't want to enter right at the 3rd drive because we have no proof that price will stop there and do what you want it to do. Instead we drew a lower trend line in the hope that price could continue lower and break this to the downside. Until this happens, we are sitting on the fence and staying away.
What happened in the end was that the momentum in Gold was still very strong and price actually used the higher 3 drive trend line to retest this on the topside to propel price higher.
No break of the lower trend line, no trade. Sometimes its better to walk away and live to trade another day then to let ego get the better of you.
Now, the market doesn't trend in a straight line, so when we saw the price in Gold make its way to the $1900.00 level we looked to see if we could get any confirmation selling signals for a potential profit taking opportunity.
Its easy for anyone to show profitable trades but we believe that showing examples of why you wouldn't take a trade or what to look for to avoid a potential losing trade is just as important.
As you can see from the 15 Minute chart, price started to form a bearish selling 3 drive pattern at the highs just above the 1900 level. When we saw the 3rd and final drive high reject a little lower this sparked our interest.
With any price pattern we look to trade we don't want to enter right at the 3rd drive because we have no proof that price will stop there and do what you want it to do. Instead we drew a lower trend line in the hope that price could continue lower and break this to the downside. Until this happens, we are sitting on the fence and staying away.
What happened in the end was that the momentum in Gold was still very strong and price actually used the higher 3 drive trend line to retest this on the topside to propel price higher.
No break of the lower trend line, no trade. Sometimes its better to walk away and live to trade another day then to let ego get the better of you.
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