GOLD → Measured Move Complete!? Pullback to $2,200? Let's Answer
Gold had a strong breakout above $2,075 on March 24th, 2024, leading to a measured move target of roughly $2,400. Gold overshot to $2,430 and ended last week with a strong sell signal at the target. Should we short here?
How do we trade this? 🤔
This is an optimal time to short on the lower timeframes given we see a confirmation candle on the hourly chart. I would remain bullish on Gold given the macro trend on the higher timeframes like the Daily and Weekly. After three pushes up post-breakout, hitting the measured move target, and the Daily RSI being overbought for about 6 weeks, we should wait for the price to pullback from the breakout, likely a standard 50% pullback toward the price of the first push up; $2,200.00.
Look for a buy signal candle and confirmation off of this area to enter a 1:2 long trade targeting a take profit around the measured move high of $2,350. Taking half profits at this target is reasonable then swing the latter half of the position until we see a sell signal. After the completion of that measured move target, I would be cautious that the price wants to go any higher before hanging around in this area of price via trading range.
💡 Trade Idea 💡
Long Entry: $2,225.00
🟥 Stop Loss: $2,162.50
✅ Take Profit: $2,350.00
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of long-standing $2,075 resistance
2. Three pushes up to complete the measured move target
3. Strong sell signal after hitting that target, look for 50% pullback to Push #1 Support area
4. Look for a strong buy signal and confirmation bar, targeting a 1:2 Risk/Reward ratio trade
5. RSI at 72.00 and below the Moving Average. Has been overbought for 6 weeks on the Daily timeframe, supports pullback.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
How do we trade this? 🤔
This is an optimal time to short on the lower timeframes given we see a confirmation candle on the hourly chart. I would remain bullish on Gold given the macro trend on the higher timeframes like the Daily and Weekly. After three pushes up post-breakout, hitting the measured move target, and the Daily RSI being overbought for about 6 weeks, we should wait for the price to pullback from the breakout, likely a standard 50% pullback toward the price of the first push up; $2,200.00.
Look for a buy signal candle and confirmation off of this area to enter a 1:2 long trade targeting a take profit around the measured move high of $2,350. Taking half profits at this target is reasonable then swing the latter half of the position until we see a sell signal. After the completion of that measured move target, I would be cautious that the price wants to go any higher before hanging around in this area of price via trading range.
💡 Trade Idea 💡
Long Entry: $2,225.00
🟥 Stop Loss: $2,162.50
✅ Take Profit: $2,350.00
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Breakout of long-standing $2,075 resistance
2. Three pushes up to complete the measured move target
3. Strong sell signal after hitting that target, look for 50% pullback to Push #1 Support area
4. Look for a strong buy signal and confirmation bar, targeting a 1:2 Risk/Reward ratio trade
5. RSI at 72.00 and below the Moving Average. Has been overbought for 6 weeks on the Daily timeframe, supports pullback.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
-Joe Dean
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Trader Engineering Course (Coming Soon!)
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