Yesterday I wrote the first of a series of articles on breakout patterns for futures trading-you can read that post here. I was writing the second installment this afternoon, then got to doing my afternoon chart review.There was a great breakout setup in gold futures today; I thought I’d put up a post on it to go through a setup. Look for the second educational article on breakout trading soon.
Below is the daily chart for April gold futures.Yesterday’s bar is in the ellipse.It was an inside day and a doji bar (the open and the close were approximately the same). Monday’s trading range was 65% of Friday’s- a significant range contraction.Yesterday’s bar told us to expect a breakout, directional move today. If you knew the signals to look for, you would ahve been anticipating a breakout move today.There were a variety of entry signals you could have used to get short; the breakout point from my Trade or Fade advisory was 979.00. (I’ll be covering how to trade breakouts in a future post).
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