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How’s THIS for a Gold setup?

As we round out another market week, we have some really cool setups formulating…

Like the ones we’re seeing in Gold — specifically the December contract, Gang. Even though it’s stuck in a range right now, there’s a particular zone where you may find some solid setups.

Now what I’m going to talk about can be applied from everything to the full size contract of Gold, to Gold ETFs, even to the mini contracts. So no matter what your trading preference is, this could be something to keep your eye on as we move forward.

Here’s what we’re looking at…

STEP ONE: The Current Range in Gold

I’ve made a video below walking you through how I’ve identified the current range in Gold, and where you could look to play Gold in the coming weeks.

Right now Gold is stuck within a certain range, which you can see in the video, highlighted by the Darvas Box.

Why’s it important to identify the current range?

We can use this to then dive a little deeper and identify which side of the range we’d want to favor. I’ll give you a hint right now… I’m looking at the lower end of the range for buys or for getting long calls.

Now I think, psychologically there’s something else we need to address. Generally our emotions can swing back and forth with the market. So if there’s an up day, we feel happy about it. But if the market gets rejected at the top of the range, we’re disappointed.

This can especially come into play when we’re looking at setups within a current range.

So how do I trade within a current range then?

STEP TWO: Stay Neutral and Wait

When there’s a lot of back and forth within a range, I like to stay neutral. There’s nothing wrong with staying neutral, Gang. An important part of trading is knowing when to get into a trade, but also when to stay out of a trade.

But “Ragh you told me at the beginning there’s a possible setup within that range?”

Well, what happens if that back and forth slows down a little bit?

STEP THREE: Building a Long Position

If we’re focusing on Gold again, remember how I mentioned identifying the side of the range we’d like to favor?

Well that’s what to look for… the lower side of the current range.

Hint Hint: It can help to define the lower side as a zone to start building a long position.

If you want to do that, be sure to look for the market to bust up through about 1527, then 1545, then 1560, then maybe even new highs. That’s the upward momentum that could be built if Gold begins to move out of its current range.

If that happens, I’d expect the markets to just keep charting on up.

But for now we wait and look to get long within that range (maybe check out some GLD calls).

P.S. We’ve been looking at building long positions in Gold in the Futures Live Trading Room. If you’d like to watch it all play out (and maybe get in on some profit), you can grab a $7 trial here.

1 thought on “How’s THIS for a Gold setup?”

  1. Very helpful analysis here, Raghee! What would have to happen in the overall market to push gold lower and keep it from traveling back up?

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