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Trade Review: As Good as Gold (GC futures intra-day)

Let's take a quick look at what ended up being a juicy 5 plus to 1 risk/reward oppty in the Gold futures contract intra-day on the GC#F 7 minute chart.

As I first looked at this chart in the morning, it was clear that Price was trending lower from the top left of the screen to the start of July 9th. It was at this point when Sellers attempted to continue the move lower BUT for some reason Price was almost immediately back up into the previous range/consolidation after simply probing the lows on the 5th. This was a big clue and lead me to place the buy order shortly after seeing the vertical bars around 11am.

As with most trades you never really know how it will play out until afterwards but something about this particular read just felt right. Fortunately, the stop loss on this purchase was plenty to withstand a second probing lower before it began to take out the sellers who still wanted to believe the trend was still lower. Shortly after shaking out the weak shorts early AM on the 10th Price launched higher clarifying any confusion about its ultimate direction.

As you can see from the charts, I'm adjusting the risk via the stop loss placement as the trade goes in my favor. In order to justify this oppty prior to initiating the risk I'm looking to capture at least 5 to 1 and thus targeting the top yellow median line or the general area where Price fell off a cliff on the 5th of July noted by the vertical action lower.

This was one of those trades that make all the other misses, losers, break-evens, and no-fills worthwhile because once it started to move in the direction of profit it simply never looked back. Unfortunately, these are NOT the norm and one of the reasons it's called trading/investing as opposed to winning/printing money.

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