I hope you're doing well!
Last week in the Sunday market-breakdown I analyzed a potential buying opportunity for XAGUSD (silver). After this market-breakdown and during the week I got the same question from many members: ''why do you prefer silver over gold right now?
Everybody wants to buy gold in these uncertain times''.
I wasn't surprised when many people asked me this question. You hear 'buy gold' on the news, financial magazines/websites, social media platforms, everywhere. So our mind is nourished by this and before you realize it, you unconsciously start looking for opportunities to buy gold.
I'm not saying gold was a bad buy opportunity last week or this week but I chose silver because it had more long-term potential. The reason why it has/had more long-term potential I will explain to you in a moment.
To make something clear once and for all. For an example, I have two opportunities, the first pair I see a very nice, clear pattern with a potential risk-to-reward of 1/3. The other pair I see a slightly less clear pattern but a potential risk-to-reward of 1/9. I will ALWAYS choose the less clear pattern with the most potential!
We will start with the Weekly timeframes with a short explanation of both XAGUSD (silver) and XAUUSD (gold).
This is the Weekly timeframe before we took the entry on XAGUSD!
First of all I saw a very clear Bullish rejection on the weekly low! Then we closed above a very important institutional Supply and Demand (blue zone). Very often this zone will be tested before this impulsive zone will rise further. So we waited patiently until this zone was reached before we were interested in taking long entries. Also we had a Weekly institutional candle which supported the price. As you can see, to the left of us there's little structure which could stop the price, so there's a lot of potential for a long term trade, we're clearly NOT on the Weekly high's!
This was the Weekly chart after we took our entry 2 weeks ago!
This is the Weekly timeframe of XAUUSD.
As you can see we're clearly on the Weekly high's already, not only are we clearly on the Weekly high's, we're also seeing some clear rejection wicks! So we immediately have a war zone waiting for us when we take a long position!
This is the Daily timeframe before we took the entry on XAGUSD!
You can clearly see that we had a Bullish impulse, followed by a correction against the trend (market was getting ready for a new Bullish impulse). This correction aligned very nicely with a structural ascending trend line that protected the price. You can also see a very clear Daily Supply and Demand (white zone) which has already been injected a few times. We have determined our Daily TP on the psychological number 16.30000.
This was the Daily chart after we took our entry 2 weeks ago!
This is the Daily timeframe of XAUUSD.
You can also see a clear Bullish impulse here! The big difference with XAGUSD is, the correction. At XAGUSD we had a correction against the trend (confirmation that the price is getting ready for a next Bullish impulse), at XAUUSD we also had a correction but slightly moving with the trend (the price was not really getting ready for a next Bullish impulse).
This is the 4H timeframe before we took the entry on XAGUSD!
First of all you can see the clear rejections of both the Weekly Supply and Demand (blue zone) and the Daily Supply and Demand (white zone), this was our first indication. In addition, we also positively rejected our structural ascending trend line (second indication). Our confirmation would be a 4H Bullish M pattern. We received it and executed the trade (Bullish M example in pink).
This was the 4H chart after we took our entry 2 weeks ago, we have reached our Daily target and psychological level 16.30000!
This is the 4H timeframe of XAUUSD.
As you can also see on this chart, you can clearly see that the nature of the market is also corrective ascending, this was for me the last confirmation that I was rather interested in taking a long entry on XAGUSD instead of XAUUSD!l
lo, everybody! I hope you're all right! Last week in the Sunday market-breakdown I
This was the screenshot from at our TFD Academy where we were still patiently waiting for an entry as described, the Bullish M.
This was the screenshot of today when we hit our 4H TP and our Daily TP after 2 weeks! Look how we received the 4H Bullish M, our confirmation!
This is a screenshot where one of our members, Ayo, is still holding this trade! Patience literally pays, congrats Ayo!
I hope you've learned something about my thought process about how I chose XAGUSD over XAUUSD!
The Forex Dictionary Team.