【Scalping Course ③】Sell the rally in GOLD, where to enter? Confirm the "end of the rally" on three timeframes
GOLD Price Movement Analysis | Practical Learning Series
The 1-hour chart is in a downtrend. The 5-minute chart has spun up a little. I sold thinking, “If I sell here, I can ride the continuation of the decline,” but the price just continued to rebound and I incurred a loss through a stop-out.
Pullbacks are a selling method that tends to cause hesitation not so much about the direction itself, but about confirming whether the pullback has ended. If the reason to sell becomes only “it went up,” you may enter in the middle of a pullback.
In this lesson, we will organize the steps to confirm the end of a pullback in the order of 1-hour chart, 5-minute chart, and 1-minute chart. The way to think about the role of each time frame is“GOLD’s 5-minute is rising, the 1-hour is falling. Which one should you trust?”Please also take a look at this.
Three common scenarios where pullback selling is confusing
First, we will list scenes that tend to lure you into pullback selling. All of them look like they rose during a downtrend, so you may end up selling without distinguishing them.
| Scene | Appearance | Reason difficult to sell |
|---|---|---|
| ① The 1-hour chart itself is in an uptrend | The overall trend is bearish, but the latest 1-hour candle has closed higher | Even within a large downtrend, the rise on the 1-hour chart is “a significant pullback” when viewed from the 5-minute and 1-minute charts |
| ② The 5-minute chart is range-bound, moving back and forth | Prices keep going up and down, with little change in highs and lows | The start and end of the pullback are not determined, so you cannot verbalize where the pullback ended |
| ③ A new low was broken only by a wick | The lower wick on the 1-minute chart undercut the previous low, but the closing price moved back up | When viewed on a confirmed candle, it had not actually broken, and a rebound can continue from there |
What these three share is that the reason for the price falling cannot be explained with a confirmed candle. In the next chapter, we will decide the order of confirmation.
What you will understand from here
From here, using a fictional chart example, we will organize the three steps to consider pullback selling in order.
- A method to confirm on the 1-hour chart whether the decline is progressing
- A method on the 5-minute chart to distinguish “pullback” from “sideways”
- On the 1-minute chart, how to confirm the end of the pullback with the close and real body of the confirming candle
- Why the stop loss for selling can be triggered before the chart (including Bid/Ask calculation examples)
- A ready-to-copy “Pullback Selling Checklist” and “Practice Record Sheet”
You can read the continuation with a free viewing application
The continuation can be read with the free viewing application for this article. Those who apply may receive information helpful for short-term GOLD trading, such as the next公開 of the course.
First, start by describing in one line “where the pullback starts and ends” during a practice trade or chart review.