XAU/USD Short - 5/15m - Post NY Open - May 18 2023
We have one long term 4H PF and price broke a major support after some news at 8:30 (red line). A shorter time frame PF drawn on the 30m timeframe shows a clear path for price to follow. Upon drawing the PF, we see that 0.25/0.75 parallels are relevant and price is respecting them.
As price dropped closer to the median line, the 0.25 parallel became a resistance that price retraced back to and retested after breaking (we can see this parallel acting as a support twice in the past). First 1:2 trade was taken after the retest was confirmed with a rejection doji which signaled a drive down following momentum. SL was above the base doji and TP was at the 0.25 parallel on the other side (following the PF rule of: what happens above, so below).
The second trade was a 1:1 which was used to further capitalize on the move as the PF is further validated by what price is doing. Once the median line was broken, the sell was taken on the retest with an SL above the previous 15m and same TP as the first trade. Both trades hit TP and price rejected from this level.
As price dropped closer to the median line, the 0.25 parallel became a resistance that price retraced back to and retested after breaking (we can see this parallel acting as a support twice in the past). First 1:2 trade was taken after the retest was confirmed with a rejection doji which signaled a drive down following momentum. SL was above the base doji and TP was at the 0.25 parallel on the other side (following the PF rule of: what happens above, so below).
The second trade was a 1:1 which was used to further capitalize on the move as the PF is further validated by what price is doing. Once the median line was broken, the sell was taken on the retest with an SL above the previous 15m and same TP as the first trade. Both trades hit TP and price rejected from this level.