Important Notes:
- I update the zones of my tradingview charts every morning.
- I make daily zones (green boxes) and 1h zones (blue boxes).
- I am a scalp to swing trader. I often look at the following timeframes: 15m, 1H, 4H, 1D.
- I only observe/trade two Forex pairs: GBPAUD (British Pound vs Australian Dollar) and XAUUSD (Gold vs US Dollar).
- I journal both my losing and winning trades.
- I don’t claim myself as a guru. I am still working on refining my strategy. Thus, whatever you read here shouldn’t be taken as a piece of financial advice.
Note: A zone is a premium price area in which no one wants to give up the price. Zones usually serve as strong areas of support and resistance. Therefore, the price is expected to move from one zone to another.
In my previous trading journal, I posted that XAUUSD and GBPAUD both showed strong bullish momentum. These past few days, I only traded XAUUSD. And in this journal, I will share the learnings I had with the trades I executed recently.
By the way, I am also thinking of sticking with XAUUSD only. I started observing three trading pairs: XAUUSD (Gold vs US Dollar), GBPAUD (British Pound vs Australian Dollar), and USDJPY (US Dollar vs Japan Yen). I then scratched off UJ and sticked with the first two pairs. I think I just made the right decision as I was able to focus more on such pairs' price action. And now, I am focusing more on XAUUSD. Perhaps next week, I'll officially scratch GA off my list.
Now, let's get back to my previous trading executions. If you're not familiar with a price gap, it occurs when the market opens a session higher than the previous high or lower than the previous low. It usually happens during trading hours opening.
Take XAUUSD for example:
XAUUSD on 1H timeframe
Last week, XU ended with strong bullish momentum (left part of the yellow oblong). Forex pairs can only be traded during weekdays. And when the new trading week began last Monday, the price eventually made a gap up!
Now, if you're a novice, you would probably set a buy order after seeing such gap up since the buying momentum may continue. But no, you should expect for the price to fill that gap first before going up once again.
After seeing that the price is already exhausted, I placed a SELL order next to the confirmation candle (the red candle after the shooting star candle). I then placed my target price at the point where the gap started. After six hours, my TP was hit exactly where I expected it to be!
XAUUSD on 1H timeframe
This is the second trade I just made yesterday. After seeing that the price had already closed the gap, I was expecting it to go up once again. I waited for candle confirmations though. And after seeing that the price failed to break down further, I put a BUY order. I set the TP on the nearest resistance and it was hit after three hours.
I once hated price gaps. I was stopped out countless times before because of such occurrence. But now, I am slowly learning to ride it. I always make sure I have no floating trades at the end of the trading week to be safe from price gaps during trade openings.
If you're a novice trader like me, I encourage you to review your trades as well. Find out your strengths and weaknesses and use both to establish a good strategy. Do not be swayed by other people's strategy. Trading is a constant learning process.
Make your own strategy and learn to focus on what works. This is not a get rich quick scheme. After all, you are accountable for both the gains and losses of your trading setups, so make sure to take it nice and slow.
PS: The reasons why I am having this online journal can be found here:
Officially Documenting My Trading Journal Online
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