Premarket Prep Gold 20210602

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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 22 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

• Min. 3 times work­ing out at home + manda­to­ry cardio
• Trad­ing rules
  • Focus on tak­ing ONE trade a day. If I missed the first DTTZ then a trade needs to be tak­en on the 2nd DTTZ unless there is a high/medium ini­tia­tive activ­i­ty day.
  • Only price-action based exit rules (or if hit time stop comes earlier)
  • M15/M30 entries and exits at 1st DTTZ, M5 entries and exits at 2nd DTTZ
  • Buffer trades (prof­it tar­get >1R) are allowed and encouraged
  • 13 trades by the end of the month
• No social media / mes­sen­ger apps / phone calls allowed dur­ing the trad­ing window

Com­pared against Week­ly Trad­ing Plan

• Price is trad­ing in last week’s body with­in W1 QHi and W1-C‑S 1890.750

Non-con­jec­ture obser­va­tions of the market

• Price action
  • D1 Bear Engulf (although not the strongest) return­ing to D1-C‑D 1896.335 which is high in dis­tri­b­u­tion curve
  • H4 Bear Engulf giv­ing H4-C‑S 1911.084 with con­tin­u­a­tion down after one retest. H4 Bull­ish Inside Bar formed after react­ing off H4-C‑D 1892.728 OLD with no fol­low-through. Instead a DBD formation. 
• Trend: H4 Up, D1 Up, W1 Up
  • Pre­vail­ing trend: Trend is UP
• Mar­ket Profile
  • Flim­sy 2‑day over­lap­ping values
• Dai­ly Range
  • ADR: 20668
  • ASR: 12447
    • 312
  • Day
    • Yes­ter­day’s High 1916.510
    • Yes­ter­day’s Low 1892.290

Sen­ti­ment

• Loca­tions
  • H4-C‑S 1911.084 at VAH
• Sen­ti­ment
  • LN open
    • Below Val­ue, Out­side Range
  • Open dis­tance to value
    • 0.64xASR
  • Pre­mar­ket
    • H4 DBD formed in pre­mar­ket clos­ing slight­ly above D1-C‑D 1896.335 High in Dis­tr. Curve
  • Nar­ra­tive
    • Large imbal­ance at the open below val­ue in line with a poten­tial con­tin­u­a­tion to the H4 DBD nar­ra­tive (although price has test­ed base which is not a good sign). Even though trad­ing above D1-C‑D 1896.335 High in Dis­tr. Curve since it is high in the dis­tri­b­u­tion curve it can be some­what negat­ed if there is a con­tin­u­a­tion down. Due to the large imbal­ance price could con­tin­ue fur­ther down before revers­ing in a mean rever­sion fashion. 
• Clar­i­ty (1–5, 5 being best)
  • 3
• Hypo 1 — Trend Continuation
  • Nar­ra­tive: H4 DBD nar­ra­tive with D1 demand in the way that is high in dis­tri­b­u­tion curve and price com­ing from a D1 Bear Engulf. 
  • Pre­ferred: Strong Bear­ish PA, Extend­ing below IB with a pos­si­ble low/medium ini­tia­tive activ­i­ty day sus­tained auc­tion down. 
  • Con: Trad­ing right into supply
• Hypo 2 — Mean Reversion
  • Nar­ra­tive: open sen­ti­ment and, near­by demand, test­ed H4 base,
  • Pre­ferred: IB exten­sion down ful­fill­ing mean rever­sion cri­te­ria before form­ing a rever­sal for­ma­tion to failed auc­tion to Neu­tral Day.
  • Con: D1 Bear Engulf

Addi­tion­al notes

• Cap­i­tal preser­va­tion rule in effect

ZOIs for Pos­si­ble Shorts

• H4-C‑S 1911.084
• W1-C‑S 1890.750

ZOIs for Pos­si­ble Long

• D1-C‑D 1896.335 High in Dis­tr. Curve
• H4-C‑D 1892.728 OLD

Mind­ful Trad­ing (lack of sleep?)

• Feel­ing okay

Focus Points for trad­ing development

• Month­ly Goals
  • No momen­tum trades on Non-Farm Fridays
  • Total of 13 trades by the end of the month
• Week­ly Goal
  • Min. 3 times work­ing out at home + manda­to­ry cardio
• Risk Man­age­ment
  • With­out forc­ing a trade: aim to take 1 trade a day, if pos­si­ble 2. 
  • Cap­i­tal Preser­va­tion dur­ing draw­down allows for 1R profit-taking
  • 2 con­sec­u­tive days of lack of sleep = NO TRADING

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