Instrument: XAUUSD
Trade Type: Long
Timeframe: 4HR
Entry Price: 2,671.678
Stop Loss (SL): 2,656.668
Take Profit (TP): 2,717.027
Risk-Reward Ratio: 1:3
Outcome: Profitable
Entry/Analysis
On Tuesday, XAUUSD (Gold) began a significant bullish move, pushing higher from the support level around 2,664.465. This move was driven by a combination of technical and fundamental factors. From a technical perspective, this support zone aligned with a key historical demand area, where buyers have consistently stepped in, as well as with the 200 EMA on the 4-hour chart, a level often respected in trending markets. Fundamentally, gold’s push to the upside was fueled by growing concerns over global economic uncertainty, which weakened the US Dollar and boosted demand for safe-haven assets like gold. Given this context, I looked for an opportunity to enter a long trade, focusing on the continuation of the bullish trend. I waited for a pullback to a key support zone near the 200 EMA, which also coincided with the breakout point of a minor resistance-turned-support level, ensuring I entered at a favorable price. Once gold showed signs of a push to the upside, I entered the trade with my stop loss below the support level and aim to trail my stop as the trade hits each target.
Exit/Outcome
This trade ultimately played out exceptionally well, despite some initial uncertainty about whether the strong bullish push would sustain or if the price would fall back into a range. The momentum held steady, and the trade reached a profitable level by Friday. While my strategy rules suggest holding trades longer to capitalize on the full trend, I decided to close the trade before the market close on Friday. This decision was influenced by the potential volatility and uncertainty surrounding Trump’s inauguration, an event likely to introduce significant and unpredictable market movements. By securing profits and avoiding unnecessary exposure to risk, I ensured that my account was protected from potential drawdowns, which aligns with my overarching goal of consistent, long-term account growth.
Psychology
The decision to close the trade early reflects a key element of trading psychology: the balance between sticking to a strategy and making informed adjustments based on unique circumstances. While some may view this as deviating from the plan, I believe it demonstrates the mindset of a disciplined investor who prioritizes risk management above all else. Protecting capital is the cornerstone of successful trading, and in this instance, taking a proactive approach to avoid potential volatility was the right choice. This experience also reinforced the importance of adaptability and the recognition that rare events may require strategic flexibility. Ultimately, decisions like these strengthen confidence in one’s trading process, highlighting that preserving capital is as crucial as growing it.
Trade Score:
Execution: 3/3
Psychology: 3/3
Overall Trade 6/6
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