Gold Trader Sees 1:8 Risk-Reward Ratio in Successful Long Position

A seasoned trader has shared their reasoning for taking a long position on gold, using the E-micro Gold Futures (DEC6) contract. The entry range was between $4315 and $4320 with an initial stop-loss set at $4310.

The trade was executed on a 30-minute timeframe, leveraging a clear bullish trend in gold's price action. According to the trader, gold had been in a strong rally before entering a pullback, which returned to a key support zone on the higher timeframe.

A three-phase pullback and selling climax were identified on the 30-minute chart, prompting the trader to build long positions between $4315 and $4320. The price subsequently climbed above the EMA20, followed by continuous bullish momentum that eventually led to an 'Always In Long' stance.

The trade was executed largely according to plan, with a full exit around $4380. The risk-reward ratio for this trade was approximately 1:8.3, with the position held for about one trading day.