The gold trading is not a very easy topic. However, there are some well-known strategies which can be used to succeed in gold trading.
Price actions strategies
There was a team of the very minimalist traders, who decided to invent a very simple trading approach without any oscillators, lagging indicators, Fibonacci retracement and looked only at the actions of the price. So, they just removed all these needless things from their trading screens and predicted future price movement with a high degree of accuracy without them. We would like to present you some of their “keep it simple” strategies. 1. Pin Bar Trading Strategy A pin bar is a price action strategy that activates at important support and resistance levels. Pin bars can be taken counter trend as well. They could be easily identified, as they protrude significantly from the surrounding price bars. When they occur, it means that the strong rejection has occurred and that a potential reversal is imminent. A candlestick of this pattern consists of one price bar with small body and long shadow. The shadow shows the area of price that was rejected, and the implication is that price will continue to move in an opposite direction to the shadow of the candlestick. A bearish pin bar signal is the one which has a long upper tail, which shows that there was a rejection of higher prices and that quotes are going to move in the opposite direction in the near-term. A bullish pin bar signal has a long low tail, it shows the rejection of lower prices and tell us that there will be a price hike.
There are a few entry options for traders who decided to trade with this strategy. The first one, is when you enter the trade at the current market price. You should keep in mind that the pin bar that gives a reversal signal must be closed before you enter the market or this candle won’t be considered a pin bar. Another entry option for a pin trading signal is entering on a 50% retrace of the pin bar using a limit order. The last option is to place a buy stop above the bullish pin bar’s high and sell stop below the bearish pin bar’s low.
2. Inside Bar Trading Strategy An inside bar pattern is a two-bar price action strategy in which one of the two bars is placed within the low and high ranges of the previous bar. Inside bars indicate a brief consolidation and then a break out in the dominant trend direction. The inside bar strategy combined with a very strongly trending market is one of the best price action setups that shield you from risks and offer very large rewards. If you look at the chart below you will that a nice inside bar setup formed just after the market broke down below a key support level, the setup has since come off significantly lower and it still continues to fall towards the next support.
3. Fakey trading strategy The fakey trading strategy indicates rejection of an important level within the market. Let me explain it with an example. In the chart below we can see the market was moving up until the fakey was formed. The fakey was formed on the false breakout of the inside bar setup which occurred because some of the amateur traders having been deceived by the price movement tried to pick the market top. Then, there was a restoration of a trend – a false break has been created and closed back within the range of the mother bar (the larger one).
There are many other strategies that you could use in your intraday trading. The main advantage of these price action strategies is that they could be used by every trader no matter how long he/she trades in forex markets. And in the fact that they are so simple makes them so credible.
Have you ever thought that you can trade these indices and it can easily boost your profit? Let’s find out how you can do it.
When people hear about stocks, they imagine the Wall Street, stock exchanges with the fuss, thousands of shouting people that try to get a piece of the pie…