Gold GAP- Buying Pullbacks, Long Entry - Forex News by FX Leaders

Gold GAP- Buying Pullbacks, Long Entry

Posted Tuesday, August 29, 2017 by
Shain Vernier • 1 min read

Today’s strength in gold has the attention of the trading community. This bull run has been covered in-depth with trading ideas from my colleagues Rowan, Arslan, and Skerdian. The U.S. session open has brought a bit of a retracement, but the bulls are still firmly in control.

As we move forward into the U.S. session, I look for a challenge of the pricing gap in December gold futures.

Gold DailyDecember Gold Futures-Daily Chart

Getting in at a solid trade location during such bull runs can be a challenge. If the initial break is missed, then a technical strategy will be necessary to align risk and reward.

When a security opens gap up or down, it always grabs my attention. It really is a curious phenomenon and one that is not uncommon. I mean, how does price move when the markets are closed?

The answer is convoluted, but it has to do with liquidity providers balancing their end-of-day books. All us retail traders need to worry about is how do we capitalize on the price action?

The Trade: There is a great long entry at 38% of the current 3-day bull run in the December gold futures contract. A buy from 1312.6 will give an opportunity to profit from the run to safe-haven assets.

Gaps are prone to be filled in. When today’s gap is tested, we will have a good opportunity to get in a positive trade during the U.S. session. As always, trade smart and watch the money management!

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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