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AGG Analysis for a trade entry
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AGG Daily Chart
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I was trolling through some charts when I come across AGG ( Anglogold Ashanti Limited) for a possible trade entry….until I took a look at the market depth (Shown Below). The chart (Above) looks great and seems primed and ready for a rally but when thinking in terms of trade risk, buying just does not look very attractive. We always have to look at the depth when entering a trade as this will be a ‘heads up’ if we can expect problems when we are forced to exit at a loss. As we are essentially ‘risk managers’, to enter a trade we need to have sufficient Volume to ‘lean on’ if the trade goes sour and we are forced to hit the sell button. In the AGG example, the bids have wide gaps between and the profile is low on willing buyers. Granted the sellers are wide also, but it is always a lot easier getting out with gains in a rising market than selling on a fear driven market with a serious lack of interest from bulls and having to chase price lower.
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Market Depth Profile
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