This week’s idea is all about gold futures, where there is a potential extension opportunity for over 5,000 ticks. Trading at known levels of u-turn is key to repeating success.

Heading 1: Could Gold Futures Rally 5,000 Ticks?

Heading 2: Introduction

Gold futures have caught the attention of traders lately. With the potential extension of over 5,000 ticks, traders are looking to minimize risks and trade at known levels of u-turns. In this article, we will discuss gold futures and what the research says about potential rally.

Heading 2: The Market Review

The first thing to understand is that with a full contract, every tick is worth $10, which means there’s a $50,000 trading opportunity for traders who are willing to take on the risk. On the other hand, if traders go for a micro contract, they can expect $5,000 trading opportunities with lesser risk.

The market has been through a lot of ups and downs since May 2019. The market underwent a u-turn a little bit over three thousand ticks the first time, and a little bit over six thousand ticks the second time. This is the third year, and research shows that support is holding. The market formed a double bottom near the uptrend line, and the market broke the short-term downtrend line. These are strong signs that the sellers are losing control.

Heading 3: The Daily Time Frame

The daily time frame reveals that every candlestick represents one day of trading. With a major u-turn expected, traders should remember that because gold has been falling for about six to eight months, there will be a fight as the sellers try to break the major uptrend, and the buyers try to bring the market up. This will create a consolidation or a channel.

Heading 3: The One Hour Time Frame

Zooming in on the one-hour time frame, traders will see the channel forming, which will give them the boundaries to trade. It’s essential to understand the big picture of what’s going on and why focusing on different time frames is crucial.

Heading 4: Trading at U-Turn Levels

The key here is to trade at known levels of u-turns to minimize risks. If traders buy above the price that pushes the market down, they can buy the market longer term. In contrast, traders should buy above the top of the channel if they want to buy the market inside the channel.

Heading 5: What’s the Plan?

Waiting for the market to fall to the bottom of the channel and then buying it to the top of the channel is highly recommended. If the market breaks above the channel, waiting for a low to form ideally at the backside of the old resistance level or the top of the channel is an ideal scenario. Focusing on buying in the direction of the trend is crucial, and trading at known levels of u-turns is highly repeatable.

Heading 5: Conclusion

Gold futures are highly volatile, and traders need to understand the market trends and know when to trade. Strategically, traders should look for known levels of u-turns to minimize risks and repeat success. Buy low, sell high, and enjoy the ride.