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 closed manually
Gold seemed to break out to the upside instead of downside. I have decided to close my trade at 1352 for a small loss.Trade active
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.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.