Live Trade Number 11 – ANALYSIS and REVIEW

Filed under: Live Trades |

Our eleventh live trade, unfortunately, did not come off yesterday. The order in question was on the XAU/USD pair, which is the pair for GOLD. Let’s look at the daily chart first (see Figure 1) and I will talk you through the setup.


Figure 1.

As you can see, price had been moving downwards recently with some force. Gold is known for being a bull market generally, but this has not been the case for some time now and my feeling is that it was over-extended. So price had been moving down, and broke through a significant area of support/resistance. Price then popped back up to this area, and I was on the lookout for any price action signals on the daily and intraday charts in the direction of the recent trend.


Figure 2.

If you now look at Figure 2, you will see my reasons for taking the trade. A bearish engulfing pattern formed just slightly above the significant area of support/resistance. There were three candles here all with long upper shadows, which I thought was a good signal that the market sentiment might be about to change. So, I put an order in at a 50% retracement of the bearish candle, with a stop loss just a few pips above the high of the move, and a target of two times my risk.


Figure 3.

Unfortunately, if you look at Figure 3, you will see that our order was filled and we never got close to our target as price continued to move up. We can’t win them all, and we have to take losing as a part of the process of trading. Here are the results so far:


Trade 1: Cancelled

Trade 2: -100.48

Trade 3: Cancelled

Trade 4: 199.59

Trade 5: 200.01

Trade 6: -99.46

Trade 7: 204.56

Trade 8: 201.31

Trade 9: 197.88

Trade 10: -99.70

Trade 11: -100.07


Total Profit/Loss = +603.64 GBP

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