In this week's trading journal I will discuss my views on Oil and my Gold short trade. This week I had to build on the success from last week. One cannot let the good emotions from some great trades get the better of him. That’s when we become reckless.
I was monitoring WTI. It continued to trade in the range established in the previous weeks. I am no longer interested in this price action. I want to see a convincing break outside of this range to the upside or the downside. When this happens we will see a decent move in oil.
WTI Daily Chart. I have highlighted the recent range with two black lines.
Gold short trade
Yesterday my pending order at 1750 got filled and I am short gold. The reason is that we have a resistance level in that area. There hasn’t been any interest to trade above it last month. Therefore, I believed it was more likely for it to hold than to be broken. Using a pending order showed patience for the price to get there and in the end, it will mean more money if the trade works in my favor. If it doesn’t it will mean that I would have lost less as well, because if I had entered earlier my SL would have been wider. Patience is a virtue and it could save you money.
Gold Daily Chart. The black line highlights the resistance zone. The blue arrow shows the day and candle on which my trade was filled. The green line shows my first profit target - 1700. Second profit target is recent lows around 1680.
I will be monitoring the close today. If it appears that Gold will close in the red for the day, I will be happy to hold the trade over the weekend. If there is a reversal and we end up in an up day I will close the trade.