Good morning, Traders!
We’re taking a look at gold futures (GC) today as the market is quickly approaching its next point of retracement. In other words, the GC market is getting close to another sell-off! To learn more about retracement, take a look at this article I wrote that explains it!
While the overall direction for the GC is up, the market is about to fulfill the next up Fibonacci extension. Remember that we use Fibonacci to predict future points of resistance and support for a market. Once the price hits the next level of resistance, we’ll likely see a sell-off that forces the price down.
But we shouldn’t worry! This is expected and will be temporary. So our best course of action is to continue watching our timeframe charts and wait for the price to bounce off support, break through our counter trendlines, and reenter the buy zone. By the way, take a moment and read up on how I use counter trendlines in my setup.
Now let’s take a look at today’s GC timeframe analysis:Daily Timeframe Analysis
When we look at the daily GC timeframe chart, we see that the price is hovering just under the daily up Fibonacci extension of 1922.4 (top blue line). While the daily timeframe direction is up, we’re only a few ticks away from the next sell-off. Wonder how we determine future market direction? Check out my article on the topic!DAILY TIMEFRAME
The direction within the daily timeframe is up
1-HR TIMEFRAME
The current direction for the one-hour timeframe is up, but we’re closing in on a sell-off
THE BOTTOM LINE
The GC market’s U-turn direction is up
The GC daily timeframe direction remains up, though the market is approaching our daily up Fibonacci (top blue line). Once we hit that point, we should prepare for a sell-off
When the GC fulfills the up Fibonacci, we’ll expect a larger than normal sell-off. But we shouldn’t worry too much about this. Remember that the market trades in waves. We’ll see sell-offs and rallies as the overall direction for the market remains up.One-Hour Timeframe Analysis
Turning to the one-hour GC timeframe reveals that the market is getting closer to the next retracement point. We only have about 225 ticks remaining before we hit the up Fibonacci. Don’t remember what a tick is? Read all about tick values and contract sizes here.
The one-hour GC timeframe reveals that the market direction is still up, but we’re just 225 ticks away from the next sell-off (top blue line). Buyers should prepare to keep an eye on the GC as the price prepares to fulfill the up Fibonacci
Once the price hits 1922.4, the retracement should take over, and the price will head back down to resistance. This will be a great opportunity to review our trading plan as we wait for the price to rebound and reenter the buy zone. Check out my article on the basics of futures trading for more information about trading plans. Remember that we still expect the overall direction to remain up for the GC.The Bottom Line
The overall direction for the GC market is up, though we should prepare for a temporary dip in the price as we get closer to the next point of resistance for the market. This types of price drops shouldn’t worry us. It’s how the market works. We’ll just wait for the price to rebound and prepare for the next opportunity to buy in!
The GC is still up, but we should keep an eye on the price as we approach the up Fibonacci and prepare for a retracement (temporary price dip)
You’re on your road to becoming a futures trader with this knowledge. But how do you make a trade happen? Are you aware of the various types of exit strategies available? I can walk you through trading the GC and other futures markets step by step. Now’s the time to get started!
Keep On Trading,
Mindset Advantage: Control
What you can control… accept that others are at the wheel of the market.
Unless you’re managing a billion-dollar-plus account… odds are very good that when you make an entry – you’re not going to move the market on your own.
No… the market isn’t responding to your entry, or your account, or your track record. It’s doing its thing based on institutional activity. The sooner you recognize this, the sooner you’ll be able to start making better entries and managing tighter exits.
Why? Because you need to trade with the institutions, not against the market. This means that you should focus on controlling what you can actually control.
Let the rest go and enjoy your trading!Traders Training Session
