Well, Gold Futures, push bullish.
We’re going to follow up with gold futures. Gold Futures is behind me that remember with a full contract, every tick is worth about $10 and with a micro contract, every ticks worth about a dollar. Inside the futures market we do not monitor price movement in increments or pennies.
We do monitor just price movements and increments.
Now, what I mean by that is, Gold Futures moves only 10 cents at a time. So it’ll go 10 cents, 20 cents, 30 cents, 40 cents. So instead of saying, Hey, move this many increments, we call those ticks T I C K. And depending on your investment will depend on your, your tick value. So if you invest a full contract, every tick is valued at $10. So if you were to press the buy button and the market were to go up by 10 ticks. You just made a hundred dollars in real time. If you press the buy button that goes down 10 ticks, you just lost a hundred dollars in real time. Make sure you always double check with your broker. And it’s always a good idea to Trade with good risk management.
Gold Market is Now Bullish
Okay. So last week we talked about Gold Futures being inside of this channel. And we talked about we’re either A winning for Gold Futures to fall back down to the bottom of the channel to buy it back up or two waiting for it to break above the channel, test the backside, and then rally, okay. For a potential buying opportunity. So the market ended up breaking bullish and the buy zone. Now all in all, we were anticipating the market to break bullish.
Now, the question is going to be well, if we expected the market to go bullish, why didn’t we just buy last week? Really great question. It has everything to do with managing risks. We did discuss, especially here at traders agency, we discussed that if you’re going to buy the market last week, then the rules state that you’re going to need a very large stock. And for most people that requires a lot of ticks to risk. And depending on the investment size could be way too much money.
So instead we wait for these markets to touch these known levels of U-turn. So either i-turning above the top blue level, or U-turning at the bottom blue levels right now, the market is above the top level. So let’s talk about entry because essentially we do have a potential buying opportunity. We have our stock and we have our limited expectation. That limit is a Fibonacci extension. I don’t know if they will give it to us. Nope. It won’t a Fibonacci extension that puts us right around 1799.9, but let’s go in and draw out exactly what’s happening here.
Higher highs, higher lows
So what’s happening here. As we have this market making higher highs, higher lows, We have this angle and then we have this angle. I think that will be a little bit easier for people to understand. Okay. So what happens is we have this market Making higher highs and higher lows, higher highs and higher lows, higher highs and higher lows. And ultimately when you have this up channel, right, the thought process to say, okay, let’s trade with the trend and look to buy the market at the bottom blue level, Take profit top level buy the bottom level, profit buy low profit high buy low profit high.
Well, ultimately what ends up taking places. Is the market will eventually Break out. It’s either going to break out, down or break out above. And what we look for is we say, okay, when the market’s near the top level, we either A wait to buy the bottom blue level to prop the top level, or We let the market break up and test the backside.
Now normally what ends up happening. This is a part of our core beliefs here at traders agency is that these markets U-turn at on and or around the same price points. So right now the market is right around this area. And you will notice that we have a U-turn A U-turn and a U-turn right? So there’s a high price. There’s high price. There’s high price, more than likely a future low price could form. But the challenge is we don’t know, right? No one knows. We don’t have a crystal ball. We can’t predict the future, nor do we claim we can. And the reality of this is one or two things can take place. Number one, the market can fall back down and touch the bottom blue level. And if that’s the case, then there may be another buying opportunity. The other scenario Is the market may rally.
We just don’t know one of the things in which we try our very best to increase the odds of success is just because we’re at a low price at a no level U-turn doesn’t mean we necessarily just jump into market buying. We do call that the curse of knowledge, the curse of knowledge basically means that we’re in the area where something could happen and you don’t wait for the signal, but instead you jumped the gun and analogy that really makes a lot of sense.
Imagine you’re driving your car and you just came to an intersection.
And that intersection, the light is red and you’re staring at the red light and your brain says, Hey, eventually this light could turn green. And because it could turn green once it does, I’m supposed to cross the intersection when it’s green. Because if I do that, normally, you know, I’ll get there, I’ll get across the other side as fast and as safe as possible. It doesn’t mean that we won’t get into an accident, but it does lower the risk of getting into an accident. But if you say, Hey, the light’s Red, it’s going to turn green. Eventually let’s just run. It doesn’t matter. Eventually it’s going to turn green. That’s where usually you would get in trouble, right? So if a police officer’s there, you get pulled over, you get a ticket or you can hit, you know, traffic coming in the opposite direction. And which is not a good thing. Okay. Or crossing the other side of the intersection or worse, you run the red light and, and nothing happens. And then you record a pleasurable experience for breaking the rules, which is really, really bad because eventually it will hurt you long run on long-term.
Okay. But anyways, so what we end up doing is when We’re inside of this area. So we were inside of up Channel making higher highs and higher lows. We have a known level U-turn we’re at a low price and the buys and above the up channel market, i-turn, U- turn, U- turn, could U-turn, we bring in a blue line and we call that a counter trend line. And a counter trend line is exactly the way it sounds. It counters the trend. So if we believe the market’s going to go up, we bring in a blue line going down. And if we, if the market can close above that blue line at normally signifies, Hey, the short-term retracement is over. The extension is getting ready to get started. Resistance held us support. And what we look to do is we look to buy that counter-trend line break. We want to place it stops in the opposite zone. And then you have a strategic Exit number Fibonacci’s and it has a market extends. We take our profit.
Now this isn’t guaranteed because the market sometimes Will fall.
But that’s the reason why we have a stop for risk management. Now we take a look at the current market. What we have here is exactly what we drew out. Resistance, support, resistance, support, resistance. We were in an up channel. Gold broke above the upper channel. Gold is now at the backside of the top of the channel. Resistance could act as support. If support holds the market is expected to go up now because we do not want to run a red light and fall into the trap of cursive knowledge. We brought in our blue line. If this market can close above the counter trend line, we believe the market is going to go up, but we don’t want to buy when the market’s going down because it’s never a good idea to buy. When the sellers are in control, we want to buy when the buyers are taking control, right when they take control.
So if we can break that counter-trend line, enter into the buy zone usually means there’s an extension opportunity. We can take it towards 1799.9. Stop in the sell zone below the previous low 1755.5 entries not available yet. If you enter into the market early, without the proper entry and you get stopped out, you ran a red light and you got punished. That’s what happens. Okay? So if we break and close below support, we get back into the sales zone trades off the table. So I really needs to U-turn now, because this is an area where the market, U-turns historically, if it continues to U-turn, now it’s an odd say, it’s a good trade. It’s not guaranteed, but odds say it is a good opportunity, but if support fails and it falls, don’t look to buy off the table. And remember we’re not CTAs commodity trading advisors.
We’re not money managers. So we can’t dictate your trades. We cannot provide customized investment advice. And we would never ask you to give us money to trade on your behalf.
But ultimately we are here to share this information with you and this research to you what you do with this information is up to you. But ultimately this week’s idea is going to be Gold Futures, looking for the U-turn hold. If it does hold, we’re going to look to look to take a potential long opportunity on the way up towards 1799.9.