Golden Week Review: Violent fluctuations hide dangers. Here’s my strategy for next week!

Friday’s market was both exciting and worrying.

It opened near 4792 points, then fell to 4790 points, then rebounded symbolically to 4798 points, and then stabilized in a narrow range between 4790 and 4798 points for a long time. Frankly, this kind of volatility tests patience. I couldn’t stop myself from yawning as I traced the chart. However, I know that this calm often heralds big action.

In fact, the price fell to 4785 before surprisingly rebounding strongly to 4801. At the time, I thought that if the market could hold above 4800, buyers might push the price higher. But what happened? The price suddenly stopped at 4801 and then plummeted to a low of 4767. To be honest, for a moment I thought the seller was going to take control, but what happened? Rather than crashing, the price rebounded and returned to the 4800 level, even touching 4806.

This is a typical liquidation process that affects both buyers and sellers.

The European session didn’t stop either. The price bounced from 4779 to 4794, then back to 4800, then fell to 4782 before rising again to 4811. I advised my students at that time: Don’t risk entering such a market; don’t take risks. Nine out of ten people will fall into the trap. Indeed, after the increase, the price quickly returned to 4799, leaving those who ventured higher at a loss.

The crisis peaked during the US session.

A bull market suddenly started near 4815 and rose to 4890. This rebound is really strong, and many people started shouting: “It’s going to break through 4900!” But I advise my students in the real trading course: slow down and don’t rush up. Because these types of spikes, especially in the face of volatile news, are often driven by emotion and can collapse at any time. The result? Before I finished speaking, the price dropped from 4890 to 4848, a drop of more than 40 points in an instant. Although it rebounded to 4885, it was obviously exhausted and unable to surpass the previous high. In the subsequent midnight period, the long and short sides launched a fierce struggle between 4873 points and 4863 points, and finally entered a slow volatility decline, even falling to 4831 points on the last trading day, and finally closing near 4833 points.

Looking back on that day, I can only describe it in four words: both bulls and bears failed miserably.

The most commonly asked question this week is: Frankly, the difficulty in the market this week is not the volatility itself, but the barrage of news.

Trump and Iran have traded accusations, saying one day that “progress has been made in negotiations” and the next that “they are preparing to resume war.” Iran even went a step further, opening the Strait of Hormuz one moment and announcing its closure until the end of the war the next. The news spread like wildfire, causing market turmoil.

Then I fell into the trap.
…Students’ screenshots came in like snow, asking: “Is the market going to rise when Trump says this and that?” “Iran has closed the Strait of Hormuz, should we invest?”

My unified response is: I treat this news as empty talk.

Not to be arrogant, just because these things have no analytical value at all. They say something one day, contradict it tomorrow, and then come back the next day with a completely different story. Trading on such news is no different than speculating on gains or losses.

What frustrates me the most is how impossible it is to convince some people. I explained to them how literal the information was, but they thought I was pointing in a certain direction, so they threw everything they had at it. Then, when the market moves against them, they come to me and complain that the market has cheated them.

The market did not deceive you, you deceived yourself.

So this week I’m focusing on one rule: Don’t bet on one side until the news is confirmed. Until things are completely clear, stick to range trading and don’t take too much risk. Profit is luck, loss is huge loss. Did things change again over the weekend?

I was supposed to publish this analysis on Saturday, but I deliberately delayed it until today to see if any new information would emerge over the weekend.

Imagine what? Already appeared.

Iran opened the Strait of Hormuz, then closed it again, saying the closure would remain until the end of the war. Not only that, Trump also made it clear that if the negotiations do not make progress, the war may restart in the near future.

This is very interesting. I initially thought word might emerge over the weekend to set a timetable for negotiations, but things got tense.

But what I’m trying to say is: don’t panic.

Even amid tensions, gold prices don’t suddenly rise. The market is cautious about recent price movements. Even if there is major news, the market will have enough cooling-off period to digest the reaction. Therefore, there is no need to worry about missing out on opportunities or falling into speculative traps. Wait until the vision is clear before taking any action; there is still plenty of time.

However, I want to emphasize an important point: it may be another opportunity to buy on the rallies.

Do you remember what I said after the trading halt on Friday? The 4883-4894 range is the ideal point for peak buying. Some may have thought I was exaggerating at the time, but in retrospect, those who shorted this range made huge profits.

Not because I’m a genius, but because the technical landscape has become clear and safe-haven demand for gold is declining significantly. In the absence of any major events to stimulate the market, gold could see a sharp decline.

I plan to do the following next Monday:

If there is no substantive good news over the weekend (such as the unexpected resumption of negotiations and real progress), it is believed that the downward momentum of gold prices will intensify next week.

The logic is simple:

First, safe-haven demand falls. The support provided by geopolitical risks for gold has a fixed duration; unless the conflict completely gets out of control, this support will weaken over time. Markets cannot continue to bear the consequences of the conflict without a major escalation.

Second, crude oil dominates the market. Current events have a greater impact on crude oil than gold. High oil prices and the resulting inflation expectations are a double-edged sword for gold. However, if oil prices rise to a level that starts to trigger fears of a recession, commodities as a whole will come under pressure, and gold will be no exception.

Third, the artistic style has clear connotation. Friday’s rise and subsequent pullback to 4890 formed a long upper shadow, which is a classic selling pressure signal. If the price can hold above 4800, the situation is good; if it cannot hold even 4800, then the sellers will take control.

So, my plan for next Monday is as follows:

First focus on price stabilization at 4800.

If the price stabilizes in the 4800-4810 range after the market opens, I will consider opening a small buying position with a target of 4840-4850 range. Please note that this is a short term bounce trade; get in and out quickly with no delays.

The second is to focus on sales.

If gold rebounds to the 4870-4880 range and shows clear signs of resistance, I will not hesitate to open a short position. This is the perfect area to buy at the top; a stop loss order above 4895 will suffice.

It would be better if the rally does not break above 4840 and start falling, as this would indicate that the sellers are stronger than you expected.

The third step is to prepare for the breakout and sell short.

Once it truly breaks through the 4800 mark, it means that there is an imbalance between buyers and sellers, and sellers will take control of the situation. At this time, you can sell with the trend, taking the 4750 level as the initial target, and if it breaks, the target will be 4730.

Looking ahead, if the key 4700 level is exceeded, sellers may head towards 4660 or even 4630. I recommend that everyone be prepared to sell short and place a stop loss order at that time.

As for buying, I would be watching the key support levels of 4750, 4730 and 4700, looking for signs of a bottom and trying to capitalize on short-term rallies if the opportunity arises. But remember, this is only a temporary attempt to find out; when trading against the trend, always use small positions and always use stop loss orders.

Finally, let me say something from the bottom of my heart:

I know many people have suffered losses in this week’s volatile markets. Chasing highs leads to losses, selling lows leads to losses, and everyone is content.

But I hope everyone will remember one thing: in this market, survival is always more important than making a lot of money.

My investment philosophy has never changed – protect capital first, then talk about profits. In order to manage risk, I would rather pass up some seemingly attractive opportunities than expose my students to uncontrollable risks.

The market never lacks opportunities; what it lacks is a person who can step forward when the opportunity arises.

Money earned through luck will eventually be lost through incompetence. Strict risk control and discipline are the only way to survive in this market for the long term.

Do not hold losing positions, do not lock in losses, strictly abide by stop-loss instructions, and control the size of positions. I hope everyone reading this article will remember these 12 words.

The waves washed away the sand, leaving only the gold. The wind blew away the clouds, leaving only the survivors.

Well, that’s all for today.

If this article helps you with your trading next week, don’t forget to show your support by giving it a like. Welcome to leave a message in the comment area, I will reply as soon as possible after seeing it.

Share this article with your gold trading friends so that more people can avoid risks.

Next week, let’s be stable and profitable together!

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