Gold has been trading within range market, a symmetric triangle pattern to be exact. Elliot Wave theory says a triangle is overlapping five waves affair that subdivides 3-3-3-3-3. The chart shows how I draw those five waves pattern in the triangle. Wave 'e' seemed to end with a shooting star candle, which shows rejection from the resistance area 1355-1360. Gold has tried that zone 3 times but failed. If the five wave pattern unfolds exactly as shown above, gold will likely to move lower and break the support trend line.
Many people would wait for a break out to trade. But as I mentioned above, accordingly to Elliot Wave plus a shooting star candle appeared on the downtrend line, I would want to short this market with a tight stop loss. Once gold breaks out to the downside, it will go quickly to the support around 1310.
Otherwise a daily close above 1350 would confirm a break out to the upside. That's where I want to put my stop loss.
Trade Plan:
- Sell 1 contract at $1346/oz.
- Stop loss above 1350 (on a daily close).
- Take profit 1310.
Stay Tuned.
Many people would wait for a break out to trade. But as I mentioned above, accordingly to Elliot Wave plus a shooting star candle appeared on the downtrend line, I would want to short this market with a tight stop loss. Once gold breaks out to the downside, it will go quickly to the support around 1310.
Otherwise a daily close above 1350 would confirm a break out to the upside. That's where I want to put my stop loss.
Trade Plan:
- Sell 1 contract at $1346/oz.
- Stop loss above 1350 (on a daily close).
- Take profit 1310.
Stay Tuned.
Trade stängt manuellt:
Gold seemed to break out to the upside instead of downside. I have decided to close my trade at 1352 for a small loss.
Handel aktiv:
I have decided to re-enter my short at 1338 based due to a break out of the triangle as chart below. Stop loss 1348. Take profit 1310.
