Trade Gold Trading

When Not to Trade Gold

There are times when you should not trade Gold because at these times the market becomes illiquid and hence unpredictable. Illiquid means there are fewer traders compared to other regular times. The times not to trade the markets are:

  • News Time

Scheduled economic information reports are released/announced throughout many times of the month. These can be found, in advance on a Gold Calendar

There are 3 categories of news; yellow, orange & red, each category having a different impact. High impact fundamental news can really move the prices, sometimes causing a spike in both directions, before moving towards one direction. These are high risk times where a lot of people get stopped out.

However, it's not just the announcements themselves that can affect the market. The sentiments and predictions of what the figures will be can cause the prices to move in anticipation. It's thence not a good idea to trade during news hours.

Some major economic/fundamental news like the NFP and Interest Rates decision can cause extreme price volatility which is extremely hard to trade and can cause extreme movements in markets within seconds.

Economic data can cause a lot of speculation and thenceforth a lot of price movement.

  • Weekends

A lot can happen over the weekend leading to the market opening with a large gap. This can cause a big difference in your account.

  • Market closing times- NY closing

At the close time a number of trade positions are being closed or being swapped. This will lead to volatility in the prices and can cause the price to move erratically.

  • Asia Market

During the Asian session volumes are very low and the market move in a range of about 20 to 30 pips and it becomes very hard to trade the market because the prices falls flat. Unless you're JPY and AUD trading instruments it's best not to trade at this time.

  • Holidays

Do not trade or transact during the Holidays. This is because the Banks are closed & hence there are less participants present in the market. If the banks close for a holiday then the volume of trade transactions carried out is greatly reduced and minimized. This can lead to low price/market volatility.

Holidays like Christmas & new year traders should not trade on these days and should take time off during this week of Christmas up to new year, date two when banks resume their operations. An Economic Calendar will include a schedule of bank holidays and traders can keep updated: Example of a Financial Economic Calendar.

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