* markets A Few Tips for Trading in the Gold Commodity Market

[Guest jackwrights]

Trading gold online is one of the most lucrative choices that a trader has. On many accounts, it is more profitable when compared to foreign exchange trading. The daily range of gold is enormous; they extend to about 300-500 pips on a daily basis. Even the “small day” ranges are about 160 pips.

However, even so, there are a few things which need to be remembered, while deciding to trade gold online. One of those things is that the gold market often witness huge price reversals. An order which seems quite good can turn negative pretty fast, and an order in draw-down would also turn into profit pretty quick. The market moves at a fast speed and changes direction randomly. However, if you touch losses and then let it go on in the hope that one day it would reverse, then you might see a significant loss. Trading gold requires a lot of tact and planning. If you want to know how to do gold trading online, then look at the points below:

 

Split Personality: Gold, albeit decidedly a very volatile commodity to trade in, can make long movements at a stretch without any reversals. Even admitting that a lot of pauses are made at important s/r, it would be fruitless to expect a pullback on the best moves. It is often quite difficult to distinguish between ‘swinging’ and ‘reversals’.

Gold Respects S/R: This is one of the best things about trading gold. Owing to this feature, gold can be technically traded with accuracy and consistency. It also displays respect for trendlines, pivots horizontal s/r which are plotted manually, and Fibonacci tracing tools.

 

Accurate Reverse Candlestick Formations: The biggest advantage of this is that one can combine this with a bounce off of s/r after the prices make a move in any one direction, notwithstanding what the overall trend might be like. This normally results in a move which claims a bit of distance; usually till the next s/r. The higher the timeframe gets, the greater is the move.

 

Day Trading is Really Good: Day trading numbers for gold is fantastic. To be completely honest, the only time gold doesn’t trade well is in the last two hours of the New York session and first two hours of Asian session. However, by the time the markets open in the Far East, gold can be traded. During the Asian session, the moves prove to be far smaller in comparison to London, and London moves pale in comparison to that of NY.

 

This Market is Huge Responsive to the Price Action Strategy: Price action is the best indicator to use in any trade; and when it is commodity trading (especially for gold), predictions are very accurate. If gold makes strong movements on or off of an area after there has been a period of “quiet” price action, moves which result are usually quite consistent.

Bad Trading is Penalised by the Gold Market: Many traders make mistakes such as adopting gut moves or “revenge trading”. While this is not fatally punished in the forex market, there is no escaping in a gold market.

To sum it all up in a few words, there is absolutely no way one can take a plunge in the gold market without a proper plan in place or careful study of trade history.