Gold Trading Secrets—A Simple Gold Trading Strategy The precious metal, gold, has always been perceived as a safe haven in times of troubled times.
Our simple gold trading strategy will help you buy gold and sell gold at the same time. Our proven gold trading approach uses a combination of Fibonacci retracements and seasonality trading.
Our team at Trading Strategy Guides will reveal how to trade gold. You’ll also learn some valuable gold trading secrets that will help you bank fantastic profits.
The best strategy for trading gold, or other commodities, is to do precisely the same as the smart money trades commodities. Our simple gold trading strategy is based on what works in the financial markets.
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As a result, it’s a strategy that tells you when to enter trades on almost any time frame. Whether you’re looking at longer time frames for long-term investment or lesser time frames to enter and exit short-term trades,
If you’re worried about the economy or the economy in general, investing in gold is a great way to protect your investments. However, if you want to profit from gold trends that require a method when trading gold, use our simple gold trading strategy.
This guide will walk you through each step of learning how to trade gold the way big institutional traders do. We also provide training for the most effective fractal trading strategy.
First, let us reveal the Gold trading secrets.
Gold Trading Secrets
We’ll reveal some gold trading secrets that professional traders use to invest in gold.
There is a link between how gold moves and the seasonal pattern of gold.
There are certain times of the year when gold is stronger. There are also other times of the year when gold is traditionally weaker. Wouldn’t it be great to know in advance when gold has a higher probability of rising or a higher likelihood of falling?
Natural phenomena have the intriguing trait that they repeat themselves during the same parts of the year. Snow usually falls in winter while there is sunshine during the summer. On average, these tendencies persist. And this is precisely what seasonality is.
The gold price, according to its seasonal cycle, has the tendency to go up in the first quarter of the year. It also rises in the last months of the year as well. If you bought it, September would be one of the best trading months for the gold price.
We have to keep in mind that these are just general indicators. The gold seasonal cycles will give you the tendency of gold to bottom or top, or rally or fall, at a particular point in time.
The gold chart below shows the seasonal pattern:
The Gold seasonal cycle is important because it is one of the tools used to identify what smart money is doing.
Before we get into the Gold strategy rules, let’s take a look at the indicators we’ll need to trade successfully with this method.
The following are the only indicators you require:
Fibonacci retracements are a well-known technical indicator. They are based on the key mathematical numbers discovered many centuries ago by Leonardo Fibonacci. These numerical figures can provide us with significant areas of support and resistance.
Let us now look at how to trade gold coins successfully using these market trading secrets.
Simple Gold Trading Strategy
How to trade gold ultimately comes down to your preferred time frame.
- Do you want to daytrade gold?
- Or, do you want to swing trade gold?
Even if you’re looking to simply invest in gold and buy and hold for the long run, you can take advantage of our simple gold trading strategy. Use it to time the market, no matter your trading style. Our trading strategy makes it simple for you to see the changes in gold trends. You can easily spot those buying and selling opportunities. For the purpose of this article, we’re going to look at the buy side.
Buy Gold in the trading months with above average return
The first step is to make sure that you’re buying during the months that gold prices have the tendency to rally. According to the gold seasonal pattern, the best months to buy gold and the best ways to buy gold are in January, February, August, September, November, and December.
The one thing these months have in common is that the gold price return is above average during these trading months.
We’re going to choose and trade January so we can walk you through an actual life trade example.
The seasonal price pattern for gold tends to repeat itself quite often because smart money tends to do the same thing over and over again.
Now that we’ve spotted the influence of seasonality on gold prices, it is time to move to the second trading rule.
Wait until Gold retrace to the 0.618 Fibonacci Retracement of the previous market swing
It is not enough to understand and simply focus on the seasonal pattern. We believe you should include at least one more factor in your trading strategy. Here’s another guide to making money through trading.
When you combine the seasonal pattern with the Fibonacci retracement indicator, you are notified to a potential gold buying opportunity.
This is a solid trading system, but you must be flexible with the rules and try to incorporate them into the overall price action.
In our proposed gold trade example, we can see that gold has traded below the previous market swing’s 0.618 Fibonacci retracement. However, this took place in December, and we can see that the gold price started to rise at the start of January 2018.
The following step will also outline our Gold purchasing strategy.
Buy at support or on the way up as we break above resistance
Remember because when dealing with this type of trading principle, flexibility is key.
We propose a very simple technique for our gold purchasing strategy. If the price of gold is trading at support at the time of your analysis, you can go ahead and buy it.
However, if the market starts to rally before January, wait until we break above previous resistance before buying gold.
Which can be seen, the gold price followed its seasonality cycle. This suggests that our seasonal forecast was correct.
The next key component of our Gold strategy is deciding where to place our protective stop loss.
Place protective Stop Loss below last swing low
If gold follows its seasonal pattern, new highs should be seen rather than new lows.
If gold falls to a new low, our trade will be rendered invalid, and we want to get out of this position.
In this regard, when using this strategy to trade gold, we place our protective stop loss below the last swing low.
Let’s define our take profit strategy now that you know where to hide your stop loss.
Take Profits before the end of February and trail your SL below each swing low
If gold has followed its seasonal pattern in the first few months, it is reasonable to expect it to do so in the coming months. March is one of the worst trading months for gold, according to the gold seasonal pattern, so it’s best to liquidate your gold position and enjoy your profits.
If you had used this simple gold trading strategy, you may have forecast the new Gold trend and profited greatly from it.
You made a good profit in two months as the gold price rose from $1265 to $1366.
You can also find sell signals using the exact opposite trading rules.
The way it works for a SELL trade can be seen in the example below:
Note* We sold gold only in the months when it has the tendency to sell.
Conclusion – How to Trade Gold
If you would like to develop your gold trading skills so that you can make similar profits, simply follow our simple gold trading strategy step-by-step guide. Gold has always been perceived as a store of value or a safe haven asset that can be stored for centuries without decomposing. Also, read our best-15 Min Forex Scalping Strategy 2022 – Free Download.
The name of the game is all about trying to exploit the trends, and you can use our gold trading secrets to help you identify when gold is most likely to rally or sell. Buying gold as an investment can be very satisfying, so make sure you diversify your portfolio by buying gold.
Thank you for reading!
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