Overextended Trend Fading Long Setup

Gold extended it's bearish impulse leg into high 1230s, the move is seemingly reaching a point where sellers will want to take profit and will have to become buyers and this will potentially attract new demand and propel the price higher. However, any trade setups against the main trend are especially risky and require tight stops. Buying 1240 with 1231 stops and looking for 2R-3R targets seems reasonable.

Trade closed: target reached:

2R target reached.