No trend is up or down forever, this is a big market lesson for every trader, market is like a very quick taxi which you should be within it to gain (be sure you are not the driver).
Gold double about three times from 2008 at the beginning of the financial crisis in the united states -after that in all the world- and it make continuous gains year after year.
Chart Shows the strong uptrend for gold in the last years
Technical Analysis for gold
- First Warning :
In 2012 the gold closed below the 2011 close which means that gold make the first yearly loss from 7 years, that's was the first indication that there something wrong with gold.
For sorry if you depend on banks researches and fundamental predictions you will not believe that gold now is 1483 (14.4.2013) because they persuade us that the gold will be 2500 at the end of 2012. Really chart does not lie, it is obvious that gold is in downtrend and it broke strong and important support lines in the last period.
- In the monthly frame :
Gold lost ground in the monthly frame in the last months of 2012 and it continue lose ground month after month.
Charts shows the down tend of gold in the last period
- In the weekly frame:
We often check the weekly frame to see what is hidden in the monthly frame.
Chart shows strong support lines is broken and downtrend continue
- Gold is positively correlated to silver :
Gold and silver as two metals is always in the same direction, if gold collapse silver will do at the same time, let's see silver in the monthly chart to make sure about gold direction.
Chart shows how silver break strong support in the same time as gold
How to trade gold :
- Sell gold :
It is simple and easy and profitable and great gains is waiting you, sell gold at 1540 or near with target take profit at 1270.
- When the trend will reverse :
If any weekly candle closed above 1550, this is a warning that there something wrong, at this moment you should be cautious. But if monthly candle closed above the 1550, at this time you should reverse your trading from sell to buy.
- The optimal stop loss :
Put stop loss at 1580 so the target take profit is about 800 % of the stop loss.
- Risk management :
For accounts of 2500 USD, sell 10 ounces, if the stop hit you will lose 400 USD (16% of your account) and if the target profit hit, you will gain 2700 USD (108 % of your account).
- Do the same with Silver:
As discussed above silver and gold always in the same direction so you can easily sell silver if you prefer trading silver.
I hope for you great profits