Trading gold futures and a breakout trade

Trading gold futures and a breakout trade

In this session from the online webclass, we take a look at gold which is now testing the $1800 per ounce level then move to the fast timeframes to consider a breakout trade.

00:16

Trading gold on two-minute chart

00:16

The speaker discusses analyzing the Gold two-minute chart to identify breakaway opportunities in congested markets. They emphasize the importance of spotting these moments to successfully trade in such market conditions.

00:55

Challenges of trading congestion

00:55

The speaker discusses the challenges and strategies involved in trading fast timeframes, particularly during periods of market congestion. Many traders are uncomfortable with such fast-paced conditions, but it is possible to trade effectively by being quick and agile, employing a grab-and-tag approach—entering and exiting positions rapidly. Success in this style depends on the trader’s preference and ability to act swiftly.

01:25

Gold daily chart technical levels

01:25

The speaker discusses the current bullish outlook on gold, emphasizing a strong technical level around 1740 an ounce that was recently breached. The analysis is based on the daily chart, highlighting the volume point control as a significant support and resistance area.

01:56

Key psychological gold level 1800

01:56

The discussion focuses on gold price levels, noting that gains have been capped at 1780 due to resistance. The key psychological and technical level for gold is 1800 dollars per ounce. Once this level is surpassed, the price is expected to rise freely, potentially moving towards previous highs around 1900 to 2000 dollars an ounce seen several years ago.

02:29

Long-term gold chart breakout

02:29

The segment discusses a longer-term trading perspective, comparing a daily chart setup to a 15-second chart with a clear volume point of control. It highlights the presence of strong resistance that has now turned into support, indicating a potential breakout scenario. The price action is occurring within a congestion zone that has persisted for about three to four months, spanning from April into July. Traders and investors are advised to be patient and wait for a decisive break outside this consolidation range before making further decisions.

03:27

Volume injections and rallies

03:27

The speaker discusses the significance of a breakout above a congestion phase in gold trading, emphasizing that such a breakout creates a strong support platform for sustained upward movement. They highlight the importance of volume injections and high-volume rallies as indicators of market strength. Trading gold contracts involves significant amounts, so monitoring volume patterns is crucial. A decline in volume during a rally is a warning sign of weakness. Patience is necessary as the market builds a support platform below and resistance above, and a move through this resistance enters a low volume node, indicating potential changes in trend dynamics.

04:46

Trend monitor confidence tool

04:46

The speaker explains the function of the trend monitor tool, which helps traders stay confident in ongoing trends by indicating whether the market is bullish or bearish. It is useful in multiple timeframes to avoid premature exits from positions due to minor pullbacks or fluctuations in profit. The tool encourages holding positions longer to maximize gains rather than panicking and closing out too early. Additionally, when trading with multiple contracts, the trend monitor can guide scaling out by signaling when the trend changes.

06:19

Scaling contracts and profit taking

06:19

The speaker discusses a trading strategy that involves taking some profits early by closing part of a position while leaving the rest to run. This approach helps manage emotional responses by securing gains and reducing risk on the remaining trade. They emphasize that trading usually starts with one contract and gradually builds up, highlighting the importance of learning and executing this method carefully.

07:24

The speaker advises new traders to avoid trading large full-size contracts due to the high capital requirement and risk involved. Instead, they recommend using smaller micro contracts, especially on indices, which are more accessible and manageable. This approach is likened to trading mini or micro lots in Forex, allowing beginners to start small and learn scaling in and out effectively.

By Anna Coulling – creator of volume price analysis