GOLD

September 29th I mentioned that strictly from a trading standpoint this was a short sale setup and here would have been the entry this morning. I still feel that the fundamentals are a bit mixed in this market so I did not enter this trade.

I do not trade markets like Gold alot, so I want the perfect setup. For those wishing to trade in and out of this market alot, study this setup because it is a textbook flag/retracement against the trend trade.

You just look for established trends, which we have here and wait for a retracement against it up to a 20 or 30 period moving average. Once that setup is in place, just trade the breaks of the lines of the retracments like this one today. You can add a bunch of other "noise" to help qualify these, but over the years I never found any increased accuracy by doing that. This techinique just keeps you in sync with the overall trend in the market and over time is a profitable way to trade.

The only filter you might want to try is only taking the first 3 retracments. Once you get to 4 or more sometimes the trend is getting a bit tired and is due for a change. Just to reiterate, I do not trade like this, but this is a technique I used successfully earlier in my career. There are many traders that are quite famous that trade in this fashion alone.