Hello Everyone! Few days without posting. Let's go back with a post on Gold.
On the precious metal, I have a pending setup that was not activated yet. I'm currently using GC! (gold futures) as the instrument to gain exposure to this asset.
Here is the explanation of my setup. Let's get started.
As the price reached a key level and made a clear corrective pattern, I decided t set pending orders above the resistance zone. The objective is to enter the market on the actual breakout of this structure and avoid possible Fake outs. Of course, we will never know when we are in front of a breakout or a fake-out. However, we can maximize our chances by giving enough space to the price.
The risk to reward ratio of this setup is 3. That means that for every unit of risk I'm taking, I aim to make 3 times that in profit.
The expected duration of this setup is between 2 to 4 months.
What if this situation goes wrong? IF the setup is activated, I have a stop loss where I'm risking 3% of my capital as the worst-case scenario. I'm locking my risk at that value or close to that value (depending on executions and market volatility.) IF the setup is not activated, and I observe a new low below the structure, I will cancel the setup at the moment, and I will wait for further confirmation.
Based on historical data, I have concluded that this is a good situation to gain exposure to gold.
One of the similarities that caught my attention was comparing this with the previously bearish market from 1980 Until 2008 when the price went to the previous ATH. At that point, we observed a similar corrective pattern and, after that, a new bull run.
Thanks for reading; I hope the post was helpful. Feel free to share your view and charts in the comments. Protect your capital!
On the precious metal, I have a pending setup that was not activated yet. I'm currently using GC! (gold futures) as the instrument to gain exposure to this asset.
Here is the explanation of my setup. Let's get started.
As the price reached a key level and made a clear corrective pattern, I decided t set pending orders above the resistance zone. The objective is to enter the market on the actual breakout of this structure and avoid possible Fake outs. Of course, we will never know when we are in front of a breakout or a fake-out. However, we can maximize our chances by giving enough space to the price.
The risk to reward ratio of this setup is 3. That means that for every unit of risk I'm taking, I aim to make 3 times that in profit.
The expected duration of this setup is between 2 to 4 months.
What if this situation goes wrong? IF the setup is activated, I have a stop loss where I'm risking 3% of my capital as the worst-case scenario. I'm locking my risk at that value or close to that value (depending on executions and market volatility.) IF the setup is not activated, and I observe a new low below the structure, I will cancel the setup at the moment, and I will wait for further confirmation.
Based on historical data, I have concluded that this is a good situation to gain exposure to gold.
One of the similarities that caught my attention was comparing this with the previously bearish market from 1980 Until 2008 when the price went to the previous ATH. At that point, we observed a similar corrective pattern and, after that, a new bull run.
Thanks for reading; I hope the post was helpful. Feel free to share your view and charts in the comments. Protect your capital!
Trade closed: stop reached