Gold has been trading within range market, a symmetric triangle pattern to be exact. Elliot Wave theory says a triangle is overlapping five waves affair that subdivides 3-3-3-3-3. The chart shows how I draw those five waves pattern in the triangle. Wave 'e' seemed to end with a shooting star candle, which shows rejection from the resistance area 1355-1360. Gold has tried that zone 3 times but failed. If the five wave pattern unfolds exactly as shown above, gold will likely to move lower and break the support trend line. Many people would wait for a break out to trade. But as I mentioned above, accordingly to Elliot Wave plus a shooting star candle appeared on the downtrend line, I would want to short this market with a tight stop loss. Once gold breaks out to the downside, it will go quickly to the support around 1310. Otherwise a daily close above 1350 would confirm a break out to the upside. That's where I want to put my stop loss.
Trade Plan: - Sell 1 contract at 1346/oz. - Stop loss above 1350 (on a daily close). - Take profit 1310.
Stay Tuned.
Trade closed manually
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Gold seemed to break out to the upside instead of downside. I have decided to close my trade at 1352 for a small loss.
Trade active
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I have decided to re-enter my short at 1338 based due to a break out of the triangle as chart below. Stop loss 1348. Take profit 1310.
it was good analysis but using the rule of closed above/below would be better; sometimes/often the markets make some exhausts but in facts, there was rejection. Keep going your good works!
GOLDTREND-NET
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Totally agree that using the rule of closed above/below would be a safer choice as I also mentioned in the post too. That you would place a trade once the direction is clear. However, the purpose here was trying to use Elliot Wave to predict the trend so I wanted to be a bit riskier. Thanks for your opinion.