18/ 1 / 2013 - January

Nifty tips for gold traders.

Trading commodities is one of the most popular ways to make money. But as any field, it requires following the rules and looking for great tips. In order to be successful you need to get as much information as possible, so. Here are the tips for successful trading of gold.

 

1. Pay attention to the cycles.

2. Check all of the indicators.

3. Volume.

4. Look for the high and low points.

5. Look at the investors mood.

6. Check your analyst.

7. Look into other possibilities.

8. Follow all the time frames.

9. Do not focus on gold.

10. Do not abuse moving averages.

 

1. Pay attention to the cycles.

Markets tend to move in the cycles and turns. And cycles can be one of the niftiest tools for the market behavior-following. So, gold, just like any other asset also moves in cycles. That is why you need to follow them pretty close in order not to lose money on the closing trend that you haven’t pulled out of.

Gold Trading 1

 

2. Check all of the indicators.

Before trading gold, you need to check all of the available indicators and their performance. As we know, choosing a wrong indicator can be a fatal mistake for traders. Consider your SAR and Stochastic indicators for gold trading. These two have proved themselves to be more effective for commodities altogether and for gold especially.

 

3. Volume.

Pay a lot of attention to the volume. With gold there are four rules for the volume-rally relationship:

  • If a rally sees a rising volume – a bigger rally is about to start;
  • If a rally sees a declining volume – the rally is about to end;
  • If a decline sees a rising volume – decline is going to go on;
  • If a decline sees a declining volume – it has no meaning for the future trades.

It is worth noting that it’s important to see whether these relations have worked before in the similar situations. These are more of the guidelines for the price behavior, not set rules.

 

4. Look for the high and low points.

Highs and lows of the previous trades on the gold can easily be used like support/resistant levels. For the most part with precious metals rising and declining levels of the price are creating almost perfect support/resistance levels. And the more significant they are, the stronger the resistance/support level is going to be.

 

5. Look at the investors mood.

Monitoring investors’ mood and their sentiment can be vital for your gold trading. In case most of the investors are bullish the price for gold is likely to close to the top. In this case it is better to look out for the SELL signal on the metal. And in casegold 2of the bearish mood of the investors the situation is going to be reversed, obviously.

 

6. Check your analyst.

Some of traders tend to choose one analyst and look for his action in order to rely on him in every trade. And it is better to choose the analyst with a highly successful trading history. It is also advisable to stick to them even is the make several losing decisions along the way as because of their success rate they are likely to make the right decision the next time around.

 

7. Look into other possibilities.

I understand the urge to short and just trade gold, but it is a better option to look into some of the long investments as well. This option may lower your level of losses and make return all the more stable. There are also other benefits to this option, but that is the topic for another time.

 

8. Follow all the time frames.

Even of you are sorting gold, you need to closely follow mid- and long-term trading as well. As we know the longer the time frame you are looking for, the stronger and the support and resistance levels are going to be. And understanding the whole picture is one of the best things that you can do for your trading.

gold

9. Do not focus on gold.

No, I mean focus on gold, but do not stop following other segments of the market. In the present market situation, it is important to acknowledge that everything is tied together. So, following all of the possible segments of the market like financial market and prices for oil is just good sense as absolutely anything can trigger changes in the prices for gold.

 

10. Do not abuse moving averages.

Use moving averages only if they proved to be useful before.

 

These are the main tips for gold traders. Which ones would you follow?

 

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