CLASSICCITY
Short

Two traps in one week?

OANDA:XAUUSD   Gold Spot / U.S. Dollar
So I started Wednesday with a short position that I held overnight, I went to sleep debating about hedging the position since the risk of Syria is so prominent this week. I did not hedge my short, that in retrospect was a very big mistake, my position was roughly at break-even after having been in profit earlier. I could have either taken the profit when I had it or hedged when it became apparent the downside momentum had stalled.

Wednesday morning became a hectic day quite quickly with Trump tweeting his "Smart Missiles" (threat or bragging?) line. Of course the bulls took control and the buying became relentless. I had hedges in place to keep me in the game as each barrier fell for the bulls.

Finally Saudi Arabia had the missile scare to propel gold             on its final leg upwards. At this point I had my final hedge in place and I was nearly ready to capitulate. To salvage the trade I decided to wait and see if 1365 would be the ultimate top.

As we can see price quickly fell and as of writing this we are back down nearly $20.

The crazy part about all of this that I wanted to highlight was the false break above the Monthly Camarilla S4 Pivot . At the time it seemed the momentum was here to stay but bulls needed to close higher to protect this level. Looking back on the trade and it appears that both bears and bulls managed to get trapped in trades that without the looming prospect of war may have been wise.

Today price is flirting with breaking the S4 level which may see bulls regroup regardless of any news events.
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