Trade of the Day

Today’s trade was a Gold Feb. contract from a price of 1265.1.  The price had been moving back upwards and along the major support/resistance level of the white line at a price of 1265.0.

The yellow circled green bar that closed at its high, which was also the same as the major support level of the white line at a price of 1265.0, is our buy signal.  It is also reversing the mini-trend of the three previous bars that were returning to test that level along with the Moving Average lines, which had just recently moved to an upwards trend as the Moving Average blue line had crossed above the Moving Average red line, as denoted by the yellow X.

We would place a buy stop order just above that bar to enter the market at a price of 1265.1.  Once in the trade we would see that the price returned to its most recent high and after coming back a bit to test the Moving Average blue line it then continued to move higher.

At that point we would keep moving our stop loss order, to lock in profit, up underneath each bar as it closed until it reached the next obvious price target of the major support/resistance level of the white line at a price of 1270.0, where the move stalled and moved sideways.  When that price was reached we could have tried to exit with a sell limit order or we could have chosen to stay in the trade using the Parabolic SAR red triangles as our stop loss guide, which would have exited us out of the trade a little later inside the yellow oval.

That would give us a profit of $500.


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