RSI reversal trade in Gold today or Monday. Conf. 9emaXUP50ema

Updated

https://www.tradingview.com/x/n2Ns11IC/

You will see how and why the last RSI trade was very strong on this 4hr for gold.

Well I usually run a 9ema 21ema and 50 or 55ema.

You got it in 1. We don't pull the trigger too soon on an RSI or Stochastic XUP (oversold) or XDOWN (overbought) on the respective 20 / 80 levels on the Oscillators. Look at it this way. The crossing up or down on the 20 / 80 level is very powerful, but think of it like a boost with cheap batteries.

The real price - action confluence of the trade is achieved with the crossing up of the EMAs' or crossing down of the EMA's. Take a look at the chart. You will see that the last big RSI trade for gold on the 4hr chart got its confirmation of a crossup of the 9ema on the 50ema about 7 bars or 24 hours later than the RSI signal. Make sense? Or is just me on drugs..

Trade active

Waiting for the next 4hr RSI Trade on XAUUSD. Use 80/20 levels not 70/30 but that is still okay. 80/20 raises the bar a bit for false positives. But the real magic is not in an rsi crossup or crossdown because we all know they can run out of steam.
Set your 4hr chart up with a 9ema 21 ema and 50ema.
After your confirmation RSI signal don't pull the trigger long until you get the 2nd most important price action confirmation. 9ema MUST crossup on the 50ema. 9 crossing 21 or 34 is good. But 9 crossing up and over the 50 or 55 is bliss for a rally with WIND.

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It may take a 24 hours to see this 2nd confirmation.
That is how you play RSI and Stochastics Xups and Xdowns. Don;t listen to naysayers. They work on DEEP-PULLBACKS (oversold and overbought) but wait for the EMA's to stack before pulling the trigger long or short. Cheers, Chris

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I did see a signal on my iphone from a pro-gold trader (vip gold trader alliance) that gold may turn at 2654. That is not to say it wont selldown some more. But expect some support here.

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So for an RSI reversal trade we need a really deep pullback into oversold. Rubber band effect. But what is also needed is a swarming of volume, this is the most important thing V. Needs to be very high. That is a problem with Asia session, its a bit quiet on volume most of the time,

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See on 5m chart here a few moments ago, the Volume analysis indicator I used had 2 reasonably high volumes over the moving average, green or blue would've been better.

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I took a LONG trade down in the YELLOW ORDER BLOCK ZONE.
But what also got me into the trade was how price exited the down-wedge (maroon color) recently, gold price then bumped and has come back down to near where price exited the down-wedge.

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Buy Low. A break past 2652 & you could def go long here. Volume is the most important thing as I keep saying. Volume is starting to enter. Another fantastic confirmation prior to pulling the trigger is a bullish ema cross, ideally a 9 or 10 ema crossing over a 50 or 55 ema. A 9 or 10 crossing down on 50/55 would be for a short trade.
Bullish divergence right of screen. This may drop back to 2630. Risky at this point.

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Confirmed cross of the 9 ema crossing up and over 50. Look at the blue and green volume now traders.

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The long trade I took about 1/2 hour ago I was able to get a very tight Stop loss on, so it was 1.7 lots in xauusd. I closed out the trade a few minutes ago for 1800 AUD profit. I would normally keep for much longer with gold in this position and I think a strong position. The gold price mostly sold off on Thursday and Friday due to a double top on the daily timeframe. What you are witnessing now is the gold price making the turn from its position down and low under the double top and it will retrace back to the top.
The volume is okay and blue and green is best for this indicator. What about the bullish divergence right of screen. How much more confluence does one need.
But gold trading is risky and it could still turn and dive down 2630 or even 2610.

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To be transparent, why I closed this morning's trade in gold early is because I have some other positions currently running LONG in Gold and let me say if i'm honest and I do try to be, they are a little in the red still. Although I have plenty of Margin I am careful not to take on too much risk. Not that I see Long trades in Gold risky today, but combined with my other positions in Gold it is risky. Less is usually more, so I find if i reduce my accumulated positions in Gold Kharma will tend to take care of me, but when Im really greedy and don't sell that is when i get hammered.

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What I try to do before taking any trade long or short is to run through the important timeframes and check for things like double tops and double bottoms, heads n shoulders, because especially the former(s) these patterns can really alter how your trade turns out. I forgot to do this with the Gold long trades recently. Double Tops on Thursday. Dou!

Trade closed: target reached

Buy at current market under 2655. SL 2651.95

Easy_Explosive_Trading

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