Best Tips to Trade Gold for Daytraders
Many professional l traders believe that trading the gold is one of the hardest things in the financial market. Unlike currency pairs, the price movement of gold is a little bit different and tends to exhibit large gaps more frequently.
However, in the eyes of those in professional daytrading, making a consistent profit in gold is still simple and clear. Gold also repeat important patterns and respects different support and resistance levels like the currency pairs. Since lots of different things are there to alter the price of gold, traders need to be perfect in the execution of their trading plan.
Chart Example: Triangle Patterns
Figure: Trading the triangle pattern in Gold
Best tips to successfully trade the gold market:
- Trade with small lot size and follow proper money management rules.
- Stochastic and RSI oscillators are considered to be one of the best indicators for trading the gold. Before getting into a trade looks at the reading of the indicator.
- Avoid using too many indicators and try to trade the raw price data.
- Draw trend line, channel and important chart pattern for potential trade entry.
- Most recent swing high and low acts as significant support and resistance level for gold. Pay attention to them.
- Never enter the market in a running candle since fake out and price gap is more common in the gold market. Wait for candlestick confirmation and analyze the investor sentiment also.