Alan Solarsh explains why his bearish gold prediction played out, detailing his hedging strategy using fractals and the 8-EMA. He warns that geopolitical risk from Iran adds uncertainty and outlines the exact price level needed to confirm a supply zone.
Good morning everybody. So it looks like, as I suspected, the candles were very weak yesterday and there was possibly going to be a reversal to the downside, and it's exactly what happened. So we've got these dojis over here, all these dojis over there, which shows weakness after this slight little bullish move. And I said that the price could very possibly reverse down to this demand zone over here. I don't know if this demand zone is going to hold or if the price is going to rather go to the next demand zone below. I also said that I wasn't going to close my hedge, I was going to hold my hedge, and that's exactly what I did. And so the problem was closing the hedge, and if the price did tank, where do you open your hedge? So I also said that there was going to be another print of a fractal, which happened over here. And if I had closed my hedge somewhere here, then I would have re-hedged at that level, so it wouldn't have been such a— wouldn't have hedged much lower than where I closed my price. I'd rather be hedging in this area here than here or further to the right, which is over here, this other fractal over here. So that's not where I would have liked to have hedged because of this sideways channel. So Bill Williams says you need to be placing your trade at the nearest fractal, but sometimes it's difficult because you're in a sideways motion and then you're whipsawing in and out of the trade. Just a side note for you guys. Anyway, so it looks like the, the next candle is going to open below the 8 EMA, and then we'll have to wait and see what happens. So this demand, this supply zone over here is not a supply zone yet. Okay, if this candle reverses all the way back up into this area above, then the— that supply zone will be mitigated and will not exist. So I'm just telling you that it's a potential supply zone. A candle has to actually open now below this area here, below this area there. Okay, that's where the next candle needs to open. So below here new candle needs to open, then this area becomes the supply zone. So we'll just have to wait and see what's happening, and then we can know the direction. But right now it's looking very bearish, and the bears are in control, and the war is still on. So we still need to be conservative. We don't know what the outcome is going to be and what Iran and the IRGC are going to do. So that's what's happening, and I'll see you on the groups. Cheers!
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