Big Price Action Reversal Signal At Major Range Top – Gold Bearish Setup

gold weekly range top

During my normal review of the charts over the weekend –  I quickly identified a bearish price action setup on gold that I could not refuse.

This setup is straight forward and simple – just the way I like it.

Starting off the analysis on the weekly chart, it’s very easy to see the market is range-bound, and that price is currently testing the range top resistance.

These are the major levels where we should expect, and to look out for potential reversal signals.

Then when we step down onto the daily chart…

gold daily price action setup

On the daily chart we straight up see a bearish rejection candle (a reversal signal), coming right off the weekly structure.

The anatomy of the rejection candle looks authoritative, and is a high value trade when stacked up against a major weekly level.

My Battle Station chart assistant tool also sent me a notification to my phone – just in case I missed it 🙂

I am going to try grab a pull back entry if price retraces up the rejection candle – which it normally does when the candle is large in range like this.

If this reversal signal does play out, the reward potential is large here. Even setting a target mid way down the range will yield about 500% ROI!

I’ve set up my sell limit order, and waiting to get filled.

All the best for those trading this one 🙂

 

No Bearish Follow Through – Time To Get Out!

gold-cancel

An update for this gold trade, a sad one – because I had dollar signs in my eyes with this one.

I decided to press the eject button and bail on this trade, due to lack of bearish responsiveness.

The initial bearish rejection candle short trade was filled at the pull back entry (awesome), but there just has not been any further indication this market wants to move down.

In fact, there was a bullish rejection candle printed after the volatility caused by the FED talks at the Jackson Hole event.

Generally with these type of major weekly level trades, you want to see some decent reaction after a few days.

In this case, we can only see signs of strength, so it’s not ideal to be short any longer.

The simple way to look at these weekly trades is, the market must make a decision – “break or bounce”.

Initially it looked like a bounce, but without any downside follow through, and the presence of large bullish rejection showing denial of lower prices, it’s starting to look like it wants to “break”.

I am not going to switch and go long, I don’t really want to trade through a weekly level. I’ll wait for the market to clear the resistance and wait for buy opportunities above it.

Until the next signal – best of luck on the charts.

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9 Comments...


  1. Patrick Kariuki comment display photo
    Patrick Kariuki
    great trade idea/set up

  2. Maanan Gordhandas comment display photo
    Maanan Gordhandas
    Dale - this commentary is GOLDEN.Please keep it up. I'm a huge fan of your style of trading and your set-up explanations.Thanks!

  3. constantine comment display photo
    constantine
    You trade just like me. no fluffs pullback entry which gives little risk for massive reward. excellent.

  4. David comment display photo
    David
    Gold was also on my watch list, entered 1291. Will see how it goes. Cheers

  5. Maanan comment display photo
    Maanan
    I put on a pull back entry on Monday last week and shut it down before it could get triggered as I didn't like the price action. No decent bearish price action.On a separate note what do you think of usdjpy breaking out and making new lows?

  6. Jacques comment display photo
    Jacques
    This trade didn't go as planned...

  7. Gavin comment display photo
    Gavin
    I played the same setup and got squeezed out as well. On to the next trade.

  8. Geoy comment display photo
    Geoy
    ForexGuy, do you put all your swing trades up on here, or just educational ones?
    1. Dale Woods comment display photo
      Dale Woods
      Usually in the war room or here.
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