Premarket Prep Gold 02042021

GBPNZD in a too tight range thus focus­ing on Gold today. 

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This is my pre­mar­ket prep for today’s Euro­pean ses­sion for GOLD. This prep builds off of my week­ly trade plan I made here:

Gold Week 5 Trad­ing Plan

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The pur­pose of a pre­mar­ket prep is to find setups with­in my week­ly trade plan bias

Week­ly Focus Points

• Only take trades accord­ing to a hypo unless there are mul­ti­ple con­di­tions met

Com­pared against Week­ly Trad­ing Plan

• Trad­ing below last week’s spin­ning top test­ing W1 C‑dem below now near­ing W1 50MA in UT and W1 QLo (for a 3rd test)

Non-con­jec­ture obser­va­tions of the market

• Price action
  • D1 formed a spin­ning top with longer sell­ing wick indi­cat­ing a pos­si­ble Base with price now trad­ing below we might form a DBD
  • Some H4 redis­tri­b­u­tion and con­se­quent move away from H4-C‑S 1837.098 after mul­ti­ple tests (not hav­ing reached D1 QLo yet but closed with­in H4 QLo)
  • Pre­mar­ket: some reac­tion off D1 QLO form­ing a H1 Bull Engulf and H4 Inside Bar with long buy­ing wick. 
• Trend
  • Mixed trend: H4 up, D1 down, W1 up
• Mar­ket Profile
  • Tight val­ue cre­at­ed below pre­vi­ous val­ue (mak­ing for 3 areas in DT)
  • ADR: 27043
  • ASR: 19492
    • 490
  • Day
    • Yes­ter­day’s High 1844.830
    • Yes­ter­day’s Low 1829.720

Sen­ti­ment

• Loca­tions
  • H4-C‑S 1837.098 at VAH
• Sen­ti­ment
  • LN open
    • Below Val­ue, Out­side Range
  • Open dis­tance to value
    • 0.5xASR
  • Nar­ra­tive
    • Price got near D1 QLo and is trad­ing with­in H4 QLo but there is no close above H4 QLo (yet) and the H4 price action is still devel­op­ing as we would need a 3rd can­dle close. D1 is show­ing a pos­si­ble DBD so there is some con­flict­ing nar­ra­tives. Although the D1 nar­ra­tive might near its end (as we are near W1 crit­i­cal lev­els as well) and thus close high­er from these lev­els but we would be cer­tain of that in 4 hours. The open sen­ti­ment shows that for now the bears are still in con­trol but it could real­ly go either way as a mean rever­sion cri­te­ria is not (yet) ful­filled. Per­haps if price tra­vers­es fur­ther down before print­ing bull­ish price action we could per­haps see a mean rever­sion. Either way, going short is risky due to the amount of buy­ers around these lev­els. As always I will let the pro­file guide my trad­ing deci­sions. For now on short term I am bear­ish that could tran­si­tion in a long sen­ti­ment lat­er on. 
• Clar­i­ty (1–5, 5 being best)
  • 4
• Hypo 1 — Swing Reversal
  • Nar­ra­tive: D1 price has dropped quite some bit and we are trad­ing at W1 crit­i­cal lev­els that could see some push back. Price has come near D1 QLo with a clean arrival and print­ed a H4 Inside Bar with long buy­ing wick with­in H4 QLo.
  • Pre­ferred: Strong Bull­ish Price action with momen­tum exten­sion up. Sus­tained auc­tion. Mon­i­tor for val­ue accep­tance although val­ue is tight and there is a H4 C‑sup at VAH.
• Hypo 2 — Mean Reversion
  • Nar­ra­tive: D1 price has dropped quite some bit and we are trad­ing at W1 crit­i­cal lev­els that could see some push back.
  • Pre­ferred: Price tra­vers­ing deep­er down ful­fill­ing mean rever­sion cri­te­ria accom­pa­nied with bull­ish rever­sal price action either with­in IB or after an exten­sion down with failed auc­tion. A move up to VAL would mean a retrace­ment to D1 base and thus see more fol­low-through either in this ses­sion or pos­si­bly the next. 
• Hypo 3 — Return to Value
  • Nar­ra­tive: D1 nar­ra­tive with a pull­back to val­ue edge and con­tin­u­a­tion down. 
  • Pre­ferred: TPO struc­ture build up near VAL with Bear­ish price action rever­sal or a Sin­gle Print Fade. 
• Hypo 4 — Trend Continuation
  • Nar­ra­tive: D1 DBD bear­ish sen­ti­ment with incom­plete H4 price action for­ma­tion could push price fur­ther down/
  • Pre­ferred: Strong Bear­ish Price action with IB exten­sion down on momen­tum + sus­tained auc­tion. Mon­i­tor for a sus­tained move tak­ing out demand.
  • Cons: very risky due to trade location

Addi­tion­al notes

• BOE Mon­e­tary Pol­i­cy Report (not sure if this has any influ­ence on gold)

ZOIs for Pos­si­ble Shorts

• W1-C‑S 1889.101
• D1-C‑S 1855.789
• H4-C‑S 1837.098

ZOIs for Pos­si­ble Long

• W1-C‑D 1838.170
• H4-C‑D 1811.412 (@D1 Demand End and W1 50MA in UT)

Mind­ful Trading

• Feel­ing okay

Focus Points for trad­ing development

• Month­ly Goals
  • Con­tin­ue track­ing my DRC track­ing sheet
  • Focus on my own progress and less on others
  • Feel­ing okay with NOT trading
  • Have ‘qui­eter’ weekends
• Week­ly Goal
  • Min. 3 times hit­ting the gym
• Trad­ing Rules
  • Trade from D and upwards unless a pos­si­ble momen­tum trade, val­ue accep­tance or otherwise. 
• Risk Man­age­ment
  • 3 trades 1% risk, 3rd trade only if first 2 worked out
  • Cap­i­tal Preser­va­tion dur­ing draw­down allows for 1R profit-taking
  • 2 con­sec­u­tive days of lack of sleep = NO TRADING

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