Taking a look at the price action on Gold, we saw a high probability trade setup for a potential buying opportunity.
We saw many factors all lining up together which always helps increase the probability for you as a trader to get a good idea what direction price could go next.
As you can see from the 30 Minute chart, we saw Gold in a descending channel until it completed a larger bullish 3 drive pattern right at a previous level of support. What increased the strength of this level was that a smaller bullish 3 drive pattern also completed right at the same point.
What we needed to do now was wait to see if price would bounce to the upside from this point which occurred nicely and so with this information we can go down to our lower time frames and find a local inner trend line just above the lows and wait for this to break to the upside which will help pin point a precise entry level for the potential long trade.
For trade management, we can place our stop loss just below the 3rd and final drive while also looking to target the top side of the channel.
We saw many factors all lining up together which always helps increase the probability for you as a trader to get a good idea what direction price could go next.
As you can see from the 30 Minute chart, we saw Gold in a descending channel until it completed a larger bullish 3 drive pattern right at a previous level of support. What increased the strength of this level was that a smaller bullish 3 drive pattern also completed right at the same point.
What we needed to do now was wait to see if price would bounce to the upside from this point which occurred nicely and so with this information we can go down to our lower time frames and find a local inner trend line just above the lows and wait for this to break to the upside which will help pin point a precise entry level for the potential long trade.
For trade management, we can place our stop loss just below the 3rd and final drive while also looking to target the top side of the channel.