The six-factor confluence method for trading gold

Gold trends in clean swing sequences. Higher highs with higher lows means only buys are allowed; lower highs with lower lows means only sells. When the last two swing highs and lows disagree, the market is ranging and the strategy stands aside — counter-trend entries are the single biggest source of losing gold trades.

Entries are taken only inside the 0.5–0.786 retracement of the most recent impulse leg. That band is deep enough to give a tight stop and a 1:2 reward, but shallow enough that the trend is usually still intact. Shallower pullbacks (0.382–0.5) score partial credit; anything beyond 0.886 is treated as a failed leg.

Equal highs or equal lows collect stop orders. The strategy waits for price to wick beyond that level and close back inside — a fake breakout that hands liquidity to the move you want to join. A retracement without a sweep scores zero here, because there is no proof that resting orders were cleared.

Two things must happen before entry: a break of structure in the trend direction, and an engulfing candle that closes through the prior candle's body. The break of structure proves intent, the engulfing candle marks the moment momentum returns. This is the trigger — never the reason.

Only London (07:00–16:00 UTC) and New York (12:00–21:00 UTC) qualify, with the overlap scoring highest. Asian-session gold moves are thin and prone to false sweeps that reverse when London opens.

The 14-period ATR must sit between roughly 0.35% and 2.6% of price. Below that, targets are unreachable before the session ends; above it, stops behind structure get too wide for a sensible position size. Macro context (dollar and 10-year yield direction) adds a small bonus when it agrees.