Hi Traders,
Today, I am looking at Gold (XAU/USD)
We are in the 4-hour time frame.
Notice how the rice seems to finally be pushing upwards.
We hit the current bottom at 1681 and have since been moving upwards. I have used an ascending trend line to join the current price action as we can see that the price is currently trending higher.
Having a look to the left, I have placed some arrows pointing downwards showing previous resistance. Notice how the price has bounced off of this red zone numerous times. We have now hit that red zone again.
Are we going to bounce off of it one more time before finally breaking through and using the trend line as confluence as well as the fact that price is taking out former levels or resistance?
This is why I have put a circle around the arrow and colored it yellow.
I have highlighted two possible order block zones in blue.
I would be waiting for the price to retrace back into these blue order block zones before opening up a long position targeting around the 1771 price level. If we can catch this move upwards then I believe we could have a nice risk-to-reward setup here. The problem is the resistance above. Resistance always works against us when looking for long setups.
So if you do wish to trade these order block zones then make sure you have a realistic stop in place as market makers and institutions can see how we retail traders like to trade. The stop hunts can be quite violent in these areas close to strong support and resistance.
I suggest practicing your risk management even more stringently with these types of setups only because it is so close to previous strong resistance on the 4-hour time frame.
The way I trade these order blocks involves highlighting the most previous bearish candle before a break out of bullish price action which takes out previous resistance. We have this currently just below the main resistance above. So, should we see a small retrace into the order block zone, I will open up a small long position to try and catch the momentum of price breaking through the strong resistance above.
If the price does not respect the first order block zone, I have a second order block below which does break the trend line but since I do not only use trendlines as confluence, I see no reason why the price wouldn’t respect the second order block.
Remember, nothing is set in stone. If these positions do not play out, then this is all part of the process. We simply move on and look for other setups.
Do not be impatient. The market gives to those who practice patience.
Don’t rush the trades.
Have a great Thursday!
See you all on the next one.
The Vortex Trader.
Today, I am looking at Gold (XAU/USD)
We are in the 4-hour time frame.
Notice how the rice seems to finally be pushing upwards.
We hit the current bottom at 1681 and have since been moving upwards. I have used an ascending trend line to join the current price action as we can see that the price is currently trending higher.
Having a look to the left, I have placed some arrows pointing downwards showing previous resistance. Notice how the price has bounced off of this red zone numerous times. We have now hit that red zone again.
Are we going to bounce off of it one more time before finally breaking through and using the trend line as confluence as well as the fact that price is taking out former levels or resistance?
This is why I have put a circle around the arrow and colored it yellow.
I have highlighted two possible order block zones in blue.
I would be waiting for the price to retrace back into these blue order block zones before opening up a long position targeting around the 1771 price level. If we can catch this move upwards then I believe we could have a nice risk-to-reward setup here. The problem is the resistance above. Resistance always works against us when looking for long setups.
So if you do wish to trade these order block zones then make sure you have a realistic stop in place as market makers and institutions can see how we retail traders like to trade. The stop hunts can be quite violent in these areas close to strong support and resistance.
I suggest practicing your risk management even more stringently with these types of setups only because it is so close to previous strong resistance on the 4-hour time frame.
The way I trade these order blocks involves highlighting the most previous bearish candle before a break out of bullish price action which takes out previous resistance. We have this currently just below the main resistance above. So, should we see a small retrace into the order block zone, I will open up a small long position to try and catch the momentum of price breaking through the strong resistance above.
If the price does not respect the first order block zone, I have a second order block below which does break the trend line but since I do not only use trendlines as confluence, I see no reason why the price wouldn’t respect the second order block.
Remember, nothing is set in stone. If these positions do not play out, then this is all part of the process. We simply move on and look for other setups.
Do not be impatient. The market gives to those who practice patience.
Don’t rush the trades.
Have a great Thursday!
See you all on the next one.
The Vortex Trader.