A short term descending has formed followed by confirming candle then consolidation with a exhaustion candles. Descending > impulse candle > consolidation with in-trend .
To trade a setup like this, set a sell stop below the consolidation zone and stop loss above the zone (as marked on the chart). If price reaches the stop loss point before activating the trade, this marks the set up invalid and should be cancelled.
This is a high probability setup with passable (but not great) risk reward targets. Pure price action traders should not look to risk more than 2% of their portfolio on a set up of this calibre.
This is a counter trend trade. Note that gold is in a weekly uptrend and this is a counter trend move. For those wanting a higher probability setup, wait for price to retest the 1300 mark and buy off supporting price action in line with the overall trend.
Happy trading :)
That is the benefit of using stop orders for market entry is that the market needs to move in our desired direction before being entered into.