An opportunity to join the trend, great RR
Updated
Can you feel the gold rush? Few know this but in the past 3 years gold was in an inside bar and it broke out very convincingly.
Gold has been in my eyes the best risk to reward asset so far this year if you exclude cocoa that is just ridiculous.
I was quite upset because since it went up in a straight line I was not able to add to my position (Although I could have averaged in...), but now furtunatly it seems I am going to get a double bottom in this strong leg up with everything aligned the way I like it:
- We have a trendline very close to the price (check the idea front page).
- We have the RSI getting close to 50 which is a great place for an uptrend to rebound.
- We have the MA20 (simple moving average) very close to the price.
- The price is around the 38.2% fibonacci retracement, which is an awesome place to buy in a strong bull market, because the price often bounces there and the risk to reward and winrate balance is great. The previous wave retraced to 23.6%.
- With all the structures around the risk to reward is close to 10.
- Analysts are saying the price is droping because middle east tensions are not rising, clearly this is something that typically has short term influence and going to the extreme, even if we had peace in the middle east demand for gold would not disappear.
It's like the market is trying to scare us, shake out the weak hands. Well I am not falling for it, it will take much more to change my mind.
Central bankers might not want to buy high but if the price keeps going up they won't have a choice and they will have to buy high to avoid buying even higher.
The price since the bottom in february has gone up 10%, then 13%, it's really not unrealistic to expect it goes up another 10%.
Gold has been in my eyes the best risk to reward asset so far this year if you exclude cocoa that is just ridiculous.
I was quite upset because since it went up in a straight line I was not able to add to my position (Although I could have averaged in...), but now furtunatly it seems I am going to get a double bottom in this strong leg up with everything aligned the way I like it:
- We have a trendline very close to the price (check the idea front page).
- We have the RSI getting close to 50 which is a great place for an uptrend to rebound.
- We have the MA20 (simple moving average) very close to the price.
- The price is around the 38.2% fibonacci retracement, which is an awesome place to buy in a strong bull market, because the price often bounces there and the risk to reward and winrate balance is great. The previous wave retraced to 23.6%.
- With all the structures around the risk to reward is close to 10.
- Analysts are saying the price is droping because middle east tensions are not rising, clearly this is something that typically has short term influence and going to the extreme, even if we had peace in the middle east demand for gold would not disappear.
It's like the market is trying to scare us, shake out the weak hands. Well I am not falling for it, it will take much more to change my mind.
Central bankers might not want to buy high but if the price keeps going up they won't have a choice and they will have to buy high to avoid buying even higher.
The price since the bottom in february has gone up 10%, then 13%, it's really not unrealistic to expect it goes up another 10%.
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Still very bullish on gold, that has been in a pullback for close to 1 month now (it peaked on April 12th).Maybe 38.2% was a bit too ambitious. 50% is often a great compromise between winrate and risk reward. > 62% the risk rewards gets bigger and bigger but the winrate drops drastically.
My best guess is short term speculators that bought just weeks ago and bears (RIP) are selling, whales are loading up before the next rally.
I am adding, and depending on what the price does in the next weeks I might add some more on the way up. I wish I had a cristal ball.
Looking for any chance to buy, but not mindlessly adding no matter what, I actually want to see patterns and trends and/or new pullbacks.
In concrete term : I won't add if it pulls back further, I'll add short term based on the 4 hour chart if it starts trending as it did in the past.
And then they are those that just dollar cost average... Not my thing.
Note
50% Fib did hold! Another vertical move.Next this is what I would like to see and I think has a decent likelyhood of happening:
Another retrace, maybe 50% (not even 38.2% was maybe too ambitious did I let myself get caught in the hype?), and then trend continuation, starting "slow" then going vertical.
I would get greedy and add big on a diagonal trend as shown on this chart.
Talking about hype, even with gold impressive performance there is little interest.
This is absolutely not looking like the top of a bubble, lots of room to grow.
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