Hello team, welcome to my trade for the week
This week we are looking to short gold.
Analysis:
On the daily and for hourly timeframe we can see that we have had a strong impulse down, followed by a week of correction.
We are almost at the end of this correction, and if you look carefully you can see that the waves correspond with the Fibonacci levels of the last major impulse.
There are two options here:
One.) Either we will top out where we have previously before seeing a break of the major ascending correction
OR
Two.) We will see the entire correction play out to the previous highs before a drop.
Either way the rules for the entry stay the same.
First look for rejection from either the major Fibonacci level or the previous ceiling.
Next, look for break of the four hour ascending trend line. This is our confirmation. Though it would be tempting to enter sooner than this to save a few pips, in my opinion it is not worth it. Always wait for confirmation.
Once we are entered, it is worth always making sure that our stop loss is above previous highs. I would suggest that if we consolidate very near the ceiling, to expand your stoploss a little bit in case of the occasional news related spike.
As mentioned on the chart use the Fibonacci levels for our take profits.
News:
On Monday we will see the ISM USA manufacturing index and related News come out. This is moderate to high impact on the US dollar, and will therefore clearly have an impact on gold.
Be cautious about entering on news spikes-price will often correct to its original level prior to the news.
Obviously, anything that is very positive for the US dollar may see our trade enter slightly earlier, and anything that shows weakness for the US dollar would likely see our set up head towards the sniper entry. Remember that for the most part, news does not impact major trends and only has a short-term effect.
Mentality:
A sensible trade mentality and good risk management is extremely important, especially with gold as it can be very volatile and move very quickly. Like many other more experienced traders, I went through my phases of poor decision-making and emotional trading. Please try to learn from these mistakes rather than make them yourself. We have made a trade plan– we must stick to it. Do not spend hours staring at a chart, because you will see things that are not there. You do not need a big lot size to make a lot of money here-One of the most common mistakes traders make is using a high lot size, meaning their trade gets wiped out before it even hit their stop loss because of margin calls. Small entries with regular profits are the way forwards-anything else is gambling.
As ever, good luck and trade safe!
Like what I do? Please be sure to comment, like, and subscribe for more trade ideas from me.
DrBear
This week we are looking to short gold.
Analysis:
On the daily and for hourly timeframe we can see that we have had a strong impulse down, followed by a week of correction.
We are almost at the end of this correction, and if you look carefully you can see that the waves correspond with the Fibonacci levels of the last major impulse.
There are two options here:
One.) Either we will top out where we have previously before seeing a break of the major ascending correction
OR
Two.) We will see the entire correction play out to the previous highs before a drop.
Either way the rules for the entry stay the same.
First look for rejection from either the major Fibonacci level or the previous ceiling.
Next, look for break of the four hour ascending trend line. This is our confirmation. Though it would be tempting to enter sooner than this to save a few pips, in my opinion it is not worth it. Always wait for confirmation.
Once we are entered, it is worth always making sure that our stop loss is above previous highs. I would suggest that if we consolidate very near the ceiling, to expand your stoploss a little bit in case of the occasional news related spike.
As mentioned on the chart use the Fibonacci levels for our take profits.
News:
On Monday we will see the ISM USA manufacturing index and related News come out. This is moderate to high impact on the US dollar, and will therefore clearly have an impact on gold.
Be cautious about entering on news spikes-price will often correct to its original level prior to the news.
Obviously, anything that is very positive for the US dollar may see our trade enter slightly earlier, and anything that shows weakness for the US dollar would likely see our set up head towards the sniper entry. Remember that for the most part, news does not impact major trends and only has a short-term effect.
Mentality:
A sensible trade mentality and good risk management is extremely important, especially with gold as it can be very volatile and move very quickly. Like many other more experienced traders, I went through my phases of poor decision-making and emotional trading. Please try to learn from these mistakes rather than make them yourself. We have made a trade plan– we must stick to it. Do not spend hours staring at a chart, because you will see things that are not there. You do not need a big lot size to make a lot of money here-One of the most common mistakes traders make is using a high lot size, meaning their trade gets wiped out before it even hit their stop loss because of margin calls. Small entries with regular profits are the way forwards-anything else is gambling.
As ever, good luck and trade safe!
Like what I do? Please be sure to comment, like, and subscribe for more trade ideas from me.
DrBear
