Gold’s Next Big Move: Election Night’s Hidden Chart Signals!
Updated
Chart Analysis Summary
In both charts, we see a prominent ascending channel on a higher time frame (HTF), suggesting an overall bullish structure initially. However, there are signs of potential reversals, especially around critical levels where price fails to break higher and instead forms correctional structures. The ascending channel shown aligns with The Rule of Three, as it often precedes reversals after the third touch due to exhaustion in the trend.
Reversal Signal: Double Top with Bearish Flag
The first chart illustrates a double top pattern within the broader ascending channel, a common reversal signal. This pattern suggests a weakening bullish momentum, aligning with a probable corrective phase. Following the double top, we observe a bearish flag or descending channel, indicating that the price may continue downward after a break. This aligns with Patterns within Patterns, where a smaller bearish flag within a larger corrective structure increases the probability of a downside move.
Bull Flag Structure and Liquidity Zone Testing
The second chart labels a large bull flag on the higher time frame (4H) near a liquidity zone. The corrective phase within this flag aligns with the market psychology of retracement after an impulsive move. Multi-Touch Confirmation indicates that these structures gain credibility with multiple touches on key support/resistance lines, making the upcoming third touch a critical point for deciding the direction.
Potential Entry and Exit Scenarios
Based on Entry Types from your strategy:
High-Probability Entry: Enter on a break of the corrective structure (such as the bear flag or descending channel) following multiple touches. Place a stop loss above the recent high if you’re anticipating a downside continuation, using a reduced-risk entry if you see low-momentum candles and ascending channels close to the top.
Wait for Confirmation: Given the corrective nature, it might be safer to wait for a confirmed breakout rather than entering at the top without solid confirmation. Back-tested data often shows better results when entries are taken after the third touch or initial pullback post-breakout.
Confluence of Multi-Touch and Patterns
The multi-touch confirmation method supports the idea of a third touch before a potential breakout or breakdown. Additionally, patterns within patterns enhance reliability, as seen with ascending or descending channels within larger structures, suggesting the market’s next probable moves more accurately.
Strategy Application:
Assess the Momentum: Enter on the first pullback (flag formation) after a significant breakout if momentum is strong. For a conservative approach, watch for a third touch on the boundary of the corrective channel.
Risk Management: As part of your trading plan, place stops conservatively to avoid getting caught in corrective waves, as tight stops near liquidity zones may result in unnecessary stop-outs.
Psychological Preparation: Avoid the perfectionist trap; if the confluence signals are strong but not perfect, following the 80/20 rule may be more beneficial than waiting for ideal entries, as markets rarely align perfectly with expectations.
In both charts, we see a prominent ascending channel on a higher time frame (HTF), suggesting an overall bullish structure initially. However, there are signs of potential reversals, especially around critical levels where price fails to break higher and instead forms correctional structures. The ascending channel shown aligns with The Rule of Three, as it often precedes reversals after the third touch due to exhaustion in the trend.
Reversal Signal: Double Top with Bearish Flag
The first chart illustrates a double top pattern within the broader ascending channel, a common reversal signal. This pattern suggests a weakening bullish momentum, aligning with a probable corrective phase. Following the double top, we observe a bearish flag or descending channel, indicating that the price may continue downward after a break. This aligns with Patterns within Patterns, where a smaller bearish flag within a larger corrective structure increases the probability of a downside move.
Bull Flag Structure and Liquidity Zone Testing
The second chart labels a large bull flag on the higher time frame (4H) near a liquidity zone. The corrective phase within this flag aligns with the market psychology of retracement after an impulsive move. Multi-Touch Confirmation indicates that these structures gain credibility with multiple touches on key support/resistance lines, making the upcoming third touch a critical point for deciding the direction.
Potential Entry and Exit Scenarios
Based on Entry Types from your strategy:
High-Probability Entry: Enter on a break of the corrective structure (such as the bear flag or descending channel) following multiple touches. Place a stop loss above the recent high if you’re anticipating a downside continuation, using a reduced-risk entry if you see low-momentum candles and ascending channels close to the top.
Wait for Confirmation: Given the corrective nature, it might be safer to wait for a confirmed breakout rather than entering at the top without solid confirmation. Back-tested data often shows better results when entries are taken after the third touch or initial pullback post-breakout.
Confluence of Multi-Touch and Patterns
The multi-touch confirmation method supports the idea of a third touch before a potential breakout or breakdown. Additionally, patterns within patterns enhance reliability, as seen with ascending or descending channels within larger structures, suggesting the market’s next probable moves more accurately.
Strategy Application:
Assess the Momentum: Enter on the first pullback (flag formation) after a significant breakout if momentum is strong. For a conservative approach, watch for a third touch on the boundary of the corrective channel.
Risk Management: As part of your trading plan, place stops conservatively to avoid getting caught in corrective waves, as tight stops near liquidity zones may result in unnecessary stop-outs.
Psychological Preparation: Avoid the perfectionist trap; if the confluence signals are strong but not perfect, following the 80/20 rule may be more beneficial than waiting for ideal entries, as markets rarely align perfectly with expectations.
Trade closed: target reached
All targets reached we discussed yesterday! AMAZING trading session everyone and we are going to have some incredible opportunities coming into the rest of this year.
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Improve your overall trading confidence and performance
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