Do you see the flag? I think it is easy to spot *chuckle*, Okay what is the importance of this flag you say?
In the field of technical analysis every analyst deal with pattern, we assume that history will repeat again, market not moving randomly and we can predict what it will do in the future. Of course all is prediction and prone to failure.
For the chart above, I would like to tell you what is flag pattern, knowing what this pattern do will help you when analyzing…. but I hate to explain in very long sentence so I’ll write a very short line:
Flag pattern is continuation pattern for the last overall trend, when the flag formed, we wait for breakout following last trend
Base on my definition, if you see in my chart you can conclude that price might continue moving down further, and where you want to start selling? regular place to sell this pattern is break of lower trend line, but if your taste is weird, you can sell when price reaching top of flag (I won’t recommend it to amateur). Â From statistic, veteran claim this pattern have 80% chance to work, from myself, I don’t really like to sell the support where I must fight with the strong trend line, but I use this pattern for confirmation when I want to short from resistance, in this case top of the flag.
Okay that is for the flag, now I want everyone look carefully at the chart again and answer my question:
1. What is the major trend for gold?
2. After you spell the major trend of gold, would you like to short this “angry dragon that playing with the flag pole”?
If you change your mind, then you are not ready at all to trade and I am sure that you have no plan and no idea what to trade, maybe you are holding a trade that still not covered and looking for others to decide what to do. This is important to remember, if you already made a plan, stick with the plan and keep yourself shut out from other people opinion, suggestion and whatever else that could make you change your plan.
Your trading-career started when you stop hearing what expert saying in television, what other traders telling you to trade, in short word:
Take responsibility for your trade, learn from experience, make journal, correct what is wrong, do what is working
here is the end of this article, I’ll close it with prediction, my prediction for gold is DOWN while I write this article.