Hi traders!
Last week I outlined my plan for potentially trading Gold on the 4-hour timeframe. That article can be found here, and this chart below is what Gold looked like at the time.
Through the use of:
- Technical trend analysis (higher highs and higher lows)
- Price’s relation to the 50sma
- Fibonacci retracements
- Support/Resistance levels
- Trendlines
I identified and area where Gold could most likely retrace to, and where, according to my strategy, I may be able to find and entry.
Here is where Gold is today:
But now, a very important part of the retail trader’s habits and routines comes to the fore.
We must review our trades. We do this, for amongst other reasons:
- To see if there was a better entry, better stop loss location. This serves to adjust our strategy going forwards.
- To see how the trade played out.
- To see if taking partial profits would impact the outcome
NB. Trading is NOT the same as Investing- in trading, we understand that market moves might be short-lived. This is why we take partial-profits and try not to ‘ride’ the market move, falsely believing it will go on forever. Plenty of traders go broke never taking a profit.
In this case, Gold did a measured move up to the recent highs, BUT it stalled, now forming a Double-Top pattern, which could signal a move back down past my entry. Thank goodness my trading plan took that possibility into account!
Reviewing trades can also serve to re-affirm that sticking to our strategy has benefits that don’t always seem obvious in real-time.
Happy Trading!
