Live Trade – XAU/USD (Gold)

Filed under: Live Trades |

I have just put an order in to go long on the XAU/USD pair, which for those of you that don’t know is the pair that you can trade to buy and sell gold. If you take a look at Figure 1, you will see the basics of this trade and I will explain why I took this particular setup. As you can see, the 8-day exponential moving average has recently crossed above the 21-day exponential moving average, signalling that this market is becoming bullish. The main thing with this chart is the level of support/resistance that I have marked in with a green band. This was a very significant level in this market, and this level has held price back for some time. Therefore, when price broke through this level and more importantly, closed well above this level, I felt that this was the right time to put an order in to go long.

 

Figure 1.

I put my order in to go long at a 50% retracement of the bullish candle, with a stop loss placed just a few pips below the low of the bullish candle, and a split target of one and two times my risk (which gives me a 1% loss if the stop loss is hit, a 0.4% profit if the first target is reached before the stop loss is hit, and a 1.3% profit if the second target is reached). Whether this order will be filled is another matter, as it is quite a considerable retracement. However, if the order is filled, the good thing is that the previous area of resistance should now act as a good support level, and as our stop loss is below this level, then that provides some good protection. And needless to say, if the order is filled, then I will keep you updated on the trade as the week progresses.

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