Secrets of Gold Trading Movements
Gold is known to be a safe haven in difficult times. For example, at this time, when the Covid-19 pandemic has made the world economy stumble, many investors have decided to switch to gold. Investing in physical gold is indeed a way to protect a trader's assets from inflation. However, did you know a simple gold trading strategy for a relatively short period of time? This strategy also does not require traders to always be in front of a PC/laptop. So besides being suitable for beginners, this strategy is also suitable for traders who have a lot of work.
The Secret of the Golden Movement
There is a correlation between how gold moves and gold's seasonal pattern. There are certain times of the year when gold is stronger. There are also other times when gold weakens. Although not 100% accurate, the tendency will have the same pattern. The price of gold, according to seasonal cycles, has a tendency to rise in the first quarter and in the last months. Remember, this is just a general indicator that only gives us an idea of the possible direction of the gold price movement, down or up.
Short Term Gold Trading Strategy
If the trader's goal of trading gold online is for the medium or long term, then the trader can take advantage of the seasonal patterns shown above. For short-term or daily strategies, traders can use these strategies:
Determine the High, Low and Close Gold Prices on the Previous Day
For this first step, in the morning when the market opens the trader determines the highest/high price, the lowest/low price and the closing price/close of the previous day's movement.
Using Pivot Points
The second step for traders is to just enter the high, low, and close prices into the following formula:
Pivot point (P) = (High + Low + Close): 3
Time to Start Trading Gold
The best time to use this strategy is when the London session opens at 14.00 WIB in summer and at 15.00 WIB in winter. However, it can be used also at the opening of the New York session with the same success rate.
Strategy for Opening Buy and Sell Positions
The logic behind this rule is simple, a trader only needs to open a buy position if after the first 15 minutes the price is above the pivot point. On the other hand, open a short position if after the first 15 minutes the price is below the pivot point. Once the market shows the price is below the pivot point, it is assumed that the downward momentum in the price will continue. If the price is above the pivot point, it is assumed that the upward price momentum will continue.
Stop Loss Penempatan Placement
Place a Stop Loss 50-100 pips above the Pivot Point (for Sell positions) and below the Pivot Point (for Buy positions). Take Profit can be placed at Support I (for Sell positions) or at Resistance I (for Buy positions).
If a trader wants to try this simple strategy, please try it on a demo account first. However, for traders who are risk-takers and want to immediately be able to benefit from trading gold by using these easy and simple trading methods and strategies.
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