Why I think gold is likely to continue to sell (TEMPORARILY)
The problem is that gold is a bullish market overall so I understand why you may think it doesn't make sense to continue to sell but let's ask the simple question - if it is so bullish, why isn't it buying?
The answer I have come up with which I will be explaining in much more detail further in this post is simple - this market in particular doesn't have enough liquidity to make its move back bullish
I think gold can benefit from pushing lower and I want to explain why.
Firstly, many traders will want to sell gold at a high point and gold is extremely high right now in the grand scheme of things (having just created an all time high). It makes sense that sellers would be interested. We also know that many traders like using trendlines to fuel their trade. Interestingly enough there is an absolutely beautiful bearish trendline present right now
Now, that being said I consider my own analysis to be a bit different because I personally prefer to 1. keep things simple and 2. use as much data as I can in the most simplest of ways
That beings said the second thing I want to discuss why I think gold can benefit from going lower is this question
Who is the real target of the gold market? Buyers or sellers? If the gold market is bullish then buyers are the target. So long as gold buys the sellers would be destroyed automatically
The real problem begins when we ask - how will the buyers be destroyed in a bull market? Because let's face it - they have to be destroyed. This explains the bear move
My analysis follows 3 simple questions and they are as follows
1. Who is interested in the market (at this time)
2. Where are their stop losses (or where would they be to frustrated to keep their trade open
3. Have they been stopped out or forced to close their trade
Only once I have a definitive answer to these 3 questions then can I find an entry
So let us attempt to answer these 3 questions in what I think is a dynamic approach
In orange these are the areas (on the m15 timeframe) I think sellers may be interested but as we just discussed I don't think the sellers are the target for the market - these are just areas the market may be likely to go back up to later on
Changing to the 1 hour timeframe I can see a few areas where I believe buyers would have been interested and stopped out
And as you can see the buyers are actively being induced to buy presently again
If there are being induced to buy and we know that they have stops below this green level - shouldn't it make sense that gold will sell down below this level?
This is what makes sense to me right now - I will be setting an alert below the green zone to see how it reacts if and when it gets there
I won't be prioritizing buys nor sells at this time but I am definitely interested in it selling to below this level before buys become available to me again
What do you think?
Comment below
Don't boost if you didn't read this entire post and didn't try to understand
OR
Boost if you did read this entire post and did try to understand
The answer I have come up with which I will be explaining in much more detail further in this post is simple - this market in particular doesn't have enough liquidity to make its move back bullish
I think gold can benefit from pushing lower and I want to explain why.
Firstly, many traders will want to sell gold at a high point and gold is extremely high right now in the grand scheme of things (having just created an all time high). It makes sense that sellers would be interested. We also know that many traders like using trendlines to fuel their trade. Interestingly enough there is an absolutely beautiful bearish trendline present right now
Now, that being said I consider my own analysis to be a bit different because I personally prefer to 1. keep things simple and 2. use as much data as I can in the most simplest of ways
That beings said the second thing I want to discuss why I think gold can benefit from going lower is this question
Who is the real target of the gold market? Buyers or sellers? If the gold market is bullish then buyers are the target. So long as gold buys the sellers would be destroyed automatically
The real problem begins when we ask - how will the buyers be destroyed in a bull market? Because let's face it - they have to be destroyed. This explains the bear move
My analysis follows 3 simple questions and they are as follows
1. Who is interested in the market (at this time)
2. Where are their stop losses (or where would they be to frustrated to keep their trade open
3. Have they been stopped out or forced to close their trade
Only once I have a definitive answer to these 3 questions then can I find an entry
So let us attempt to answer these 3 questions in what I think is a dynamic approach
In orange these are the areas (on the m15 timeframe) I think sellers may be interested but as we just discussed I don't think the sellers are the target for the market - these are just areas the market may be likely to go back up to later on
Changing to the 1 hour timeframe I can see a few areas where I believe buyers would have been interested and stopped out
And as you can see the buyers are actively being induced to buy presently again
If there are being induced to buy and we know that they have stops below this green level - shouldn't it make sense that gold will sell down below this level?
I won't be prioritizing buys nor sells at this time but I am definitely interested in it selling to below this level before buys become available to me again
What do you think?
Comment below
Don't boost if you didn't read this entire post and didn't try to understand
OR
Boost if you did read this entire post and did try to understand