Leading XAUUSD Indicators

Choose a Moving Average to Trade with XAUUSD Trading Strategies

A gold trader can choose a moving average based on the xauusd chart time frame that he is trading; the gold trader might choose to use this Moving Average indicator on the minute gold charts, hourly gold charts, daily gold charts or even weekly gold charts.

The gold trader can also choose to average the closing gold price, opening xauusd price or median gold price.

Moving average gold indicator is a commonly used indicator to measure strength of gold trends. The data is precise and its output as a moving line can be customized to a gold trader's preferences.

Using the gold trading moving average is one of the basic ways to generate gold buy and sell trading signals which are used to trade in the direction of the gold trend, since the Moving Average indicator is a lagging indicator and a gold trend following indicator - this means that it will tend to give late gold entry signals as opposed to leading xauusd indicators. However, as a lagging gold indicator it gives more accurate gold signals and is less prone to whipsaws compared to leading xauusd indicators.

Gold Traders choose the moving average period to use depending on the type of gold trading they do; short term gold trading, medium term xauusd trading and long term xauusd trading.

• Short-term gold trading: 10 - 50 Moving Average Period
• Medium-term gold trading: 50 - 100 Moving Average Period
• Long-term gold trading: 100 - 200 Moving Average Period

The xauusd price period in this case can be measured in minute gold charts, hourly gold charts, daily gold charts or even weekly gold charts. For our example we will use 1 hour xauusd chart time frame period.

Short term gold trading moving averages are sensitive to xauusd price action and can spot gold trends signals faster than the long term moving averages. Shorter term gold trading moving averages are also more prone to whipsaws compared to long term moving averages and a gold trader should choose a gold price period that will generate a gold signal early but not give too many gold trading whipsaws.

Long term gold trading moving averages help avoid gold trading whipsaws, but are slower in spotting new gold trends and gold trend reversals.

Because long term moving averages calculate the average using more xauusd price data, it does not reverse as fast as a short term gold trading moving average and it is slow to catch the changes in the xauusd trend. However, the longer term gold trading moving average is better when the gold trend stays in force for a longer time but may also give late gold signals.

The work of a gold trader is to find a moving average period that will identify gold trends as early as possible while at the same time avoiding fake-out signals (gold trading whipsaws).