Hello. Welcome to CantosCharts Masterclass. I'm Sandy Jadeja, Chief Technical Analyst for City Index and welcome back to another lesson in how to use charts to identify profitable trading opportunities. As always, these are simply for information and educational purposes only.

Well we're going to be using technical analysis to look at some markets and in this lesson here I want you to have a look at this chart and see quite obviously which direction this market is going in and we can clearly see that it's up. So we're taking a look at the weekly charts over here and we're going to use that as the dominant trend, but we're going to use the daily charts for entry and exit.

So we know this market is up. How do we actually get on board this train? Well, if we're coming down to the daily charts, we previously noted that this market had been consolidating and there was two key levels to watch out for. There was the 1,577 and the 1,464. Clearly, if the weekly trend is up then we want to be identifying an opportunity to jump on board. So in this case here we were looking for a break above the 1,577 area and that's exactly what has happened on gold prices recently.

Now, if we take a look at the parabolic indicator that had given us an earlier entry. So in other words, you can use price itself to enter the market or you can use technical indicators and the parabolic indictor, as discussed in previous videos, is one of my favourite tools because it enables you to identify exact price points on where you want to enter and also where you would like to place your stops.

So at the moment, as you can see, with the market moving towards the upside, the parabolic indicator is still below the current price. That's suggesting that the market should head higher and is currently in a bullish trend.

On the longer term however, if this market comes back into the box with the consolidation range, we do not want to see gold prices trade below 1,464 on the August contract. That would suggest that we had a false break on the upside and we could be heading back lower. I think that's unlikely given the circumstances with the stock indices and the uncertainty and volatility with the currencies at the moment, but nevertheless, we've still got to maintain risk management on these markets.

Now here we've got the candlesticks chart. Currently, we have a hanging man pattern which is suggesting that the current move to the upside may be ending on the short-term.

So already we have seen lower prices in gold and we could potentially be looking for support at the 1,545 area. What is the 1,545? Well it's quite simply the 20-day moving average. So if markets come back and stabilise at 1,545, you could look for a re-entry or, additionally, just add on to your positions which you could have been adding on the way up.

So this market is generally bullish on both the longer term and the shorter term timeframes. Speaking right now, there could be a potential pullback and we'd be looking for support at 1,545 and it's as simple as that.

So basically, use a top down approach. Use the longer term timeframes for your trend identification and use your shorter term chart (in this case, the daily chart), for your entries and your stops and of course, always keep your analysis clutter free.

You will notice that we've only used really just the one indicator to determine the trend direction and of course, use stops to protect your capital. You can use them as a figuratively money stops. You could use a percentage stop or you can use the technical indicators.

Well I hope this lesson has been simple and useful for you. We'll certainly keep an eye on gold in future lessons. In the meantime, have a great and trade safely and I look forward to seeing you in the next lesson.