A Golden Easter Egg?

By: Ben Drage | Sun, Apr 16, 2017
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As markets closed ahead of the extended Easter weekend Chart 1 shows that the recent strength in the price of Gold meant that it was to be found nudging at the line of resistance stretching back to the all-time high in 2011. It concerns me somewhat that this resistance is so clear - when a line becomes too obvious it has a habit of becoming self-fulfilling.... Price tested that line numerous times through 2016 before falling heavily away from it in the aftermath of November's US election.

Gold Futures Weekly Chart
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The competing claims of Bulls and Bears are clamouring to tell you that we are, on the one hand, about to break through this line into a Golden Dawn for the precious metal or, on the other, that we are going to sink again to the depths of a three figure price tag....

So which way is it going to break? A weekly chart is all well and good for long term investors but most people want much more immediate direction. Because a change of trend or behaviour always becomes apparent on shorter timeframes before doing so on longer ones we've been following 240 min Gold and looking for clues.

Chart 2 is 240 min Gold up to Thursday's close and Chart 3 is the same but with our Pitchfork added. I hope that you can see that by "framing" or "describing" the action via the Pitchfork we are able to detect nuance and moves that we would otherwise miss.

Gold Futures 4-Hour Chart
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Gold Futures 3-Hour Pitchfork Chart
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Price moved from initial Support in the circle at the Lower Parallel, via Support along the Quartile to arrowed Resistance at the Median Line. It then dipped to find Support along the green Sliding Parallel before rising again to, and then through, the Median Line.

We are currently watching to see if this Support continues - any move lower, particularly if the Median Line again became Resistance, would alert us to a potentially larger move away from the Weekly Trendline. So long as price remains above the Median Line we will view Gold on this timeframe to be in a Bullish uptrend.

Median Line Analysis allows us to define and discover lines of Support and Resistance that others just don't see. Instead of looking at horizontal levels we are looking at the moves in terms of the Path of Price and we use the pitchfork to give a framework to those moves. Not only does this provide High-Probability, Low-Risk entries and exits but we have a massive edge on the market because our different approach allows us to use Supports and Resistances that others just don't see.....

 


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Ben Drage

Author: Ben Drage

Ben Drage
Forex Analytics

Forex Analytics' Ben Drage is an experienced, thirty-five year veteran of the Financial Markets

I was born and spent my formative years in London and am half British and half Australian. After completing my Law degree at Oxford University I continued my studies by taking my Bar Finals Exams.

However, being from a family with interests in the financial sphere I decided to look to embark on a career in the City of London. I joined a boutique moneybroking firm in 1982 and progressed via a number of different entities in that environment, eventually specialising in the nascent interest rate swap and options markets.

Despite revelling in the surroundings of a dealing room, in 1998 I decided to leave the City and to concentrate on my personal trading. The freedom that came with that choice has allowed me to live in different parts of Europe and to pursue my interests across the financial field. I currently live in a rural part of Southern England.

I very much enjoy the process of technical analysis - viewing it almost as a chess game where intention and meaning have to be gleaned from a two-dimensional chart. Spatial awareness and how to react to it are very important parts of the trader's armoury and I have discovered the process of coaching this increasingly rewarding. Moreover I have noticed that the exercise also makes me focus more efficiently on my own decision making.

My thirty-five years' experience in the markets has led me to appreciate that simplicity is almost always the key to success. I have found that Median Line Analysis is far and away the most effective way to accomplish this. By setting up Forex Analytics I am hoping to share my enthusiasm to "Decode the Markets” by deciphering them and stripping away the complexity and confusion that often baffles veterans and novices alike.

I want Forex Analytics to provide World Class Analysis to traders and investors, at an affordable price, by getting back to the very essence of what drives the financial markets."

I can always be contacted by email at support@forex-analytics.com

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