Trade the next breakout in gold

In the course of the trading year 2013 gold experienced one of its largest annual decline, dropping to $ 375 per ounce. Despite this strong trend is tempting, it can be difficult to know when and where it is advisable to enter the market. Today we focus on the trading of the next movement of gold by taking advantage of a breakout for the Entry.

Learn forex gold daily chart

(Created Using FXCM Marketscope 2.0 charts)

The first step in trading a breakout is to recognize existing support and resistance levels. Usually this is done by using the application of a trendline connecting either a series of highs or lows. Below we see how a konsolidierendes triangle formed by the gold, which is formed by the sloping line of resistance, which coincides with the close of the ascending line at $ 1,350. Once the points have been found in the image to traders can prepare for a breakout.

A breakout occurs when price shown either the support or resistance level breaks. Since gold is in an extended downtrend, it offers excellent opportunities, new breakouts for sale in trend direction. For this purpose, entry orders can be placed under the support and the previous low. When the price crosses this point, our entry is triggered and a new short position is taken. The risk management must always be respected, and the stops are placed on our extrapolated resistance line. In this sense, we have now further discuss the complete trade setup for a breakout in gold.

Learn Forex - Gold-day consolidation

(Created Using FXCM Marketscope 2.0 charts)

I prefer to sell gold at a fraction toward lower lows in the direction of the primary trend. Sales entries could be considered under the trendline support and the previous low of $ 1,338.06. Stops can be placed over the falling resistance line at 1.395 or better. The first profit targets should be at $ 1225.00 or better in order to form at least a risk-reward ratio of 1:2.

Alternative scenarios include that gold breaks through the resistance. If the prices break to higher highs, our sales order entry can be deleted.