Precious metals – Gold and Silver had been in an impulsive downtrend. During such times it is best to adopt a few basic but important methods to time the entry for short term trading.
Look at the below chart of MCX Gold where we have applied the concept of Channels, RSI and Horizontal line. A confluence of these simple methods can help one to derive good trade setup.
MCX Gold hourly chart:
The above shows a simple method where we can see amazing application of channels along with horizontal line concept and Relative strength index (RSI) indicator.
An ideal trade setup would be for the short positions as the overall trend over past few days is negative. It is wisely said to trade in the direction of the trend as the line of least resistance is on downside.
Now when prices break below the support horizontal line and reverses from the channel resistance as well that is the ideal trade setup. We can see reversal in RSI as well during such time. We also keep a track on price movement on COMEX Gold to have high conviction.
Price has again arrived near the channel resistance and is on the verge of reversal from there. It is about to break below the short term red channel support and RSI is also on the verge of reversal. So is it time to go short on GOLD?
Get access to Intraday / Positional advisory on commodity where we shoot the calls via sms or yahoo with complete follow-up. Always remember trading is never a certainty and will involve risk. So maintaining strict stoploss is must and if you are not able to do that one trade can eat up all your profits. Also when someone talks about 99% accuracy think again! You think it is really that easy when we are forecasting the future. I agree there are times when your accuracy is around 95% for certain period but that too will not last long. It is best to be conservative and maintaining it near the zone of 70% – 85% is what can result into overall profitable trades.
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