It’s been a while since I wrote on this blog, so I thought I’d use the opportunity to explain this morning’s 5 minute Gold short that I tweeted live on Twitter.
This was a great setup, because not only was it at a supply zone, but it was also our famous bull trap.
As price broke the magenta coloured line, breakout traders entered long and traders who were already short were stopped out. Once everybody was suitably confused, price was free to fall.
There’s another more subtle point to note on this chart… demand at the blue box caused a bounce and this was eventually consumed (or engulfed). This signaled the down move was not over yet, despite price making another run to the highs and confusing retail traders yet again! Because of this, I was confident holding for a final scale.
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