The tension on markets drives gold rates to a narrow band, which becomes dangerous for intraday traders. Why dangerous? Because gold usually has a tendency to break down its bands with abrupt impulses, which may yield big losses to intraday traders within a very short period of time, that do not set limitations on the beatings.
Graphically one may notice a classic isosceles triangle on a daily chart, the triangle which is already done. The price is gripped between two frames, leading to traders who will be waiting for a breakdown towards any direction. On Monday a breakdown attempt failed and the price grew. On Wednesday a raise attempt might become possible.
A pretty logical anticipation. But it is not recommended to place deferred orders outside current bands in hope of catching a large movement. Yes, it is technically correct and the theory of classical strategies of breakdown requires these actions, however, given situation is seen by many traders and analytics. It is not ruled out that the first breakdown will be false for getting more profitable conditions when buying and selling gold by high rollers of the market, before the main movement ( since on a current market it is impossible to find a large liquidity). That is why it is better to wait for “live” breakdown and its confirmation. In case of impossibility of tracking the situation one may place deferred orders outside the triangle, but with obligatory set of stop orders, limiting the loss.Social button for Joomla