On August 31st, we can never control the market's direction; the market follows its own rhythm and will not change due to personal will. However, there are two things entirely within our control: whether to execute a trade, and the timing of that execution! The core of trading, ultimately, comes down to timing, position, and structure. Wait for the appropriate time window, identify key price levels, understand the market structure, and then execute your strategy.
A common flaw among many investors is this: before entering a position, they are restless and anxious, fearing they will miss the move and rushing to place orders; but once the position is established, they immediately fall into extreme tension. Every minor fluctuation on the chart stirs emotions, with fear and greed following in quick succession. Once emotions take over, it is easy to lose composure and unconsciously deviate from the trading plan set in advance. At the stop-loss point, one clings to hope; at the take-profit point, one becomes greedy and overstays. When trading behavior is dictated by emotion, this becomes a very significant root cause of trading losses.
In the gold market, when the price effectively breaks below the largest correction low of this cycle at 4565, it can basically be determined that this short-term upward trend has officially ended. As previously discussed in earlier analyses: truly effective key support levels often see a rebound upon first touch, and the market rarely gives ordinary traders repeated easy opportunities to enter. The logic is simple—if an important support level is repeatedly tested and eventually directly breached, then it is no longer a pullback but a shift in the original trend.
This is also why last Friday we recommended prioritizing long positions based on the premise that the low had not been broken. As long as you entered, securing a 30-dollar gain was a non-issue. However, after Friday evening's hawkish remarks from Waller, gold fell without looking back. The 4465 bull defense line was completely shattered, the price accelerated its decline, and the market transitioned into a weak environment. How should trading rhythm be managed going forward?
Driven by these fundamental catalysts, Friday night saw a direct sharp selloff, with the daily chart closing as a large bearish candle. This morning, there was a continuation of the decline breaking lower. Today's trading approach is to focus on finding opportunities to short on rebounds. Of course, one could also speculate on a rebound, but there is no need to rush. It is essential to wait for clear signs of stabilization at the bottom before considering it, and do not attempt to pick a bottom prematurely. Currently, the resistance above is near 4472, while support below is at the morning's low of 4396. There is currently some stabilization around the 4396 level. Based on the premise that the 4396 low remains unbroken, one can consider going long to gauge the rebound's strength, with a stop-loss if the low is broken. On a rebound approaching the 4472 area, a short position can be initiated upon confirmation of resistance.
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