Counter trend trade :
Slight correction expected after a beautiful drop in Gold yesterday,
Possible to hit the previous lowest low on the daily or 4Hr timeframe (marked with a simple line for possible rejection) or price could easily break the current lower low (might occur just before 14:30 sast - news - normally 30 min before news)
This is Biased in my belief that a small correction occurs after a big drop or rally
This correctional move setup is for a temporary buy - very risky - hoping to make some cents, awaiting my next trend trade sell setup around the same area expected to reject price (previous daily lowest low or the previous 15 min OB before the drop - there’s two I see so the closest to current price.
NB!: this is a down trend and this is simply a test of theory that I’m taking - simply trade with the trend and note this is not advice.
Slight correction expected after a beautiful drop in Gold yesterday,
Possible to hit the previous lowest low on the daily or 4Hr timeframe (marked with a simple line for possible rejection) or price could easily break the current lower low (might occur just before 14:30 sast - news - normally 30 min before news)
This is Biased in my belief that a small correction occurs after a big drop or rally
This correctional move setup is for a temporary buy - very risky - hoping to make some cents, awaiting my next trend trade sell setup around the same area expected to reject price (previous daily lowest low or the previous 15 min OB before the drop - there’s two I see so the closest to current price.
NB!: this is a down trend and this is simply a test of theory that I’m taking - simply trade with the trend and note this is not advice.
Trade active:
Prior to entry
-market pushed up creating a low level demand zone and a higher probability supply zone at the very small rally base structure
-market then pushed down and didnt break the lowest low of the newly created demand signifying a potential correction just starting - creating higher lows on the 15 min chart - possible trendline rejection created at this point, first attempt at breaking the small supply failed and price retraced back to demand and trend line for its next attempt, this attempt should be the break needed to slightly increase the odds of the correction being larger and reaching the next point of interest level (the daily/4hr resistance line)
- possible early rejection @ $1881 - before the daily level (very insignificant level, but could potentially push price back a little to create another small supply zone)
- Only 17 Candles left before news events and possible negative volatility and a continuation of price.
Theory - Clear movement to start from 11:00 SAST if trend line and demand zone hasn't been retested again
-market pushed up creating a low level demand zone and a higher probability supply zone at the very small rally base structure
-market then pushed down and didnt break the lowest low of the newly created demand signifying a potential correction just starting - creating higher lows on the 15 min chart - possible trendline rejection created at this point, first attempt at breaking the small supply failed and price retraced back to demand and trend line for its next attempt, this attempt should be the break needed to slightly increase the odds of the correction being larger and reaching the next point of interest level (the daily/4hr resistance line)
- possible early rejection @ $1881 - before the daily level (very insignificant level, but could potentially push price back a little to create another small supply zone)
- Only 17 Candles left before news events and possible negative volatility and a continuation of price.
Theory - Clear movement to start from 11:00 SAST if trend line and demand zone hasn't been retested again
Comment:
- Price retested the trendline and demand on 15 min twice since last update
- Price formed a triangle signifying no directional pressure, generally I would not have traded this setup however all signs point to continuation of the downtrend with hesitation to move higher than its previous most recent base structure
- due to the retest price has not shown clear direction as stipulated conditions in my previous updates
- naturally price should go further down however the next demand point is far down near the 1818 region, with price just breaking the previous lowest low on the daily, normally a retest of that area occurred before the next continuation down….
- in retrospect to this, more traders would have sold at the base with stop losses just above which would be clear liquidity to further my theory
- still awaiting the conclusion
- expectation is still that price will move higher breaking the base inorder to retest the previous daily level and gain momentum for its next move
- Price formed a triangle signifying no directional pressure, generally I would not have traded this setup however all signs point to continuation of the downtrend with hesitation to move higher than its previous most recent base structure
- due to the retest price has not shown clear direction as stipulated conditions in my previous updates
- naturally price should go further down however the next demand point is far down near the 1818 region, with price just breaking the previous lowest low on the daily, normally a retest of that area occurred before the next continuation down….
- in retrospect to this, more traders would have sold at the base with stop losses just above which would be clear liquidity to further my theory
- still awaiting the conclusion
- expectation is still that price will move higher breaking the base inorder to retest the previous daily level and gain momentum for its next move
Trade closed: stop reached:
Market news liquidated both sellers above and below ranged area (expansion phase)
- conditions for liquidity entry almost fulfilled
- market is definitely not moving further down for now
- conditions for liquidity entry almost fulfilled
- market is definitely not moving further down for now
- this retest has a higher probability of breaking the demand due to the main trend being a down trend
- it’s also highly possible for liquidation to occur just below the demand before the correction actually starts (hence why it’s a risky trade)
- doubting my theory of the correction starting now, however I will hold my original theory of demand staying intact until price reaches its correctional end
- if theory is incorrect price will either continue from liquidation or continue further in the down trend