Simple plan for XAUUSD that banks on this setup happening again
I am looking for price action to repeat in this very simple plan which may or may not happen.
This setup involves a single 55-period exponential moving average. All the rules of using a moving average remains the same. As always, there are many possible models or strategies, this is not the only one. Note also that it does not work all the time. Instead of placing a limit order, this looks like a market order following a visually confirmed signal.
- Between January and April early this year USDSGD (top panel) printed a triangular consolidation.
- It then cut above the 55-ema, did a high, printed a consolidation then followed with a throwback.
- A throwback to the 55-ema turned out to be a good entry (see blue arrow) for a long continuation.
- XAUUSD appears to have done exactly the same as USDSGD did so far.
- Now we want to see if A) a throwback will happen and B) whether the 55-ema will be a good throwback support for long entry.
Some traders will probably wonder why I am looking out for a price pattern that happened in USDSGD to appear in XAUUSD. My answer:
- I have seen similar patterns happen often enough in different pairs.
- There is no point to over-think – it happens or it doesn’t.
Now that a plan is in place, watch.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.