Two Identical Trades on the XAU/USD Forex Pair

This was a pretty standard bullish engulfing bar trade(Green Arrow). I placed a buy order at the high of the the bar and took a profit at the $1207 area. I decided that area was significant, since there was a previous high there from the 13th of April(Red Arrow), where the market took a very sizable plunge. Extremes are great entry and exit areas, as there are many orders stacked around them.

The second XAU/USD trade was very similar to the first one. However, this one had a triple divergence showing(brown lines), and a small pin-bar(Green Arrow) where I entered short. The profit target on this trade was the $1198 price level(Orange Arrow), as that area was used as resistance during the 14th of April, and again on the 15th as well.

This kind of trading works great in sideways markets, but be extremely careful in strongly trending periods. Even triple divergence setups can fail miserably when the market is stampeding in a particular direction.

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