Today’s trade was a Gold Feb. contract with a buy order from a price of 1239.2. The price had been moving back towards the Moving Average blue line after it had a big spike downwards at the release of a report at 5:30 am PST.
The yellow circled green bar is our buy signal as it closed at its high and the price had just broken the Parabolic SAR green triangles in the small yellow circle and now had the support of the Parabolic SAR red triangles. We would place a buy stop order just above the high of that bar at a price of 1239.2.
Our first obvious price target is the white line at a price of 1240.0 as multiples of five are psychologically significant price levels. From there we would look for the price to go back to the same level it was at before the big spike due to the release of the report.
Once that price level is reached, we would then want to have our stop loss order move up with the Parabolic SAR red triangles until the price started to converge at that level.
That would give us a profit of at least $400.