Live Trade – Gold

Filed under: Live Trades |

 

I initiated a live trade on the XAU/USD pair last night, which is the exchange rate between gold and the United States dollar. The exact levels of this trade can be seen on my published FX account at:

 

http://www.myfxbook.com/members/jjrgaskell/daily-trade/357261

 

Figure 1.

Now, if you take a look at Figure 1, which is the 4-hour chart for the XAU/USD pair, I will take you through the ins and outs of the setup of this trade. As you can see, price has been moving down recently. The 8-period EMA is crossed below the 21-period EMA, and this shows us that the market is in a down trend (incidentally, the 8-day EMA is also crossed below the 21-day EMA on the daily chart as well, which is a good, bearish sign). I have also marked in what I thought was a significant level of support/resistance on this chart (marked with a thin red horizontal line). Therefore, when a nicely formed pin bar emerged and penetrated this level, before reversing and making a bearish signal, I felt that this was a good area to put an order in.

 

I thus put an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the move, and a target of two times my risk. My lots were split so that 70% of them were taken as profits at the 1R area, and the other 30% would run to either the stop loss or the target area. The order has since been filled, and the 1R area has been reached. Therefore, we have taken some profits, and we are now essentially in a no-lose trade, with us being guaranteed at least some small profits even if the stop loss is hit.

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