Gold GAP- Buying Pullbacks, Long Entry
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.
December 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!