Trade Gold Trading

Types of Gold Analysis

There exist two primary methods of analysis applicable when trading gold:

  1. Technical Analysis
  2. Fundamental Analysis

Technical Analysis

Technical analysis involves the application of charts and indicators to ascertain the trajectory of gold prices and decide which trade entry point is optimal at any given moment.

Technical analysis will involve study of chart prices--movementprice--movements, indicators & various line studies that are used for this analysis.The study of chart prices include study of chart patterns that form repeatedly and these patterns are studied by technical traders so that when they appear again on the Gold trading charts traders can then know how to interpret these patterns and know which trades to place in the gold market.

There is also the discipline of studying candlestick patterns. The candlestick trading methodology was originally created by traditional Japanese traders and is widely employed today in the gold trading market. Technical analysts dedicate time to learning about and understanding candlestick formations so they can apply this knowledge when trading gold online.

Another analytical technique utilized for trading XAUUSD (gold) involves the application of line studies - lines drawn onto charts and interpreted in various manners to generate trading signals.

Support and Resistance lines mark price levels where the price might pause or change direction. Traders use these levels to decide where to trade or set profit and stop loss amounts. Lines highlight these important levels.

Trend Lines - Given that gold prices typically sustain movement in a general direction for extended durations, known as trends, traders employ trend-lines to ascertain the current direction of the gold market and to pinpoint optimal junctures for initiating or terminating trade positions relative to these lines. Uptrend lines denote a generally rising market trajectory, whereas downtrend lines signify that the market's collective movement is predominantly descending.

Technical indicators - the main trading tools used by trading analysis traders are indicators. Indicators are tools that are used to calculate the direction of the market price trend and the energy of the trends.

Here are the different tools that technical analysts use to make trades in the online gold market, along with the trading tools that are most common and liked.

  1. Moving Averages
  2. RSI
  3. MACD
  4. Bollinger Bands

Novices must familiarize themselves with these indicators so they can effectively use them to generate signals.

Technical analysis is a wide lesson & traders will continue to learn more about trading analysis as they continue reading this gold trading tutorial. Various lessons will be discussed on their own in the technical analysis concepts section of this web site.

Fundamental Analysis

Fundamental analysis relies on interpreting economic reports, primarily from the USA, to decide whether to sell or buy commodities like gold against currencies such as the US Dollar.

Traders handle basic reports this way. Good US news leads to selling XAUUSD and keeping dollars. Bad US news prompts buying XAUUSD. It rises against the dollar from poor reports.

In fundamental analysis traders will use economic reports like:

  1. GDP
  2. Trade Balance
  3. Employment Reports
  4. Inflation Reports
  5. Interest Rates

These reports will determine whether to invest in or sell gold based on their results.

Analysts employing this methodology for price movement assessment must stay current with economic declarations originating from the United States to inform their decisions on which direction to favor when trading the XAUUSD (gold) market online.

Selecting a Method

Traders can decide which of the above analysis to use when trading xauusd based on what method they prefer. This website will mainly focus & concentrate on trading analysis methods and beginners can learn all the technical analysis lessons that they require to know before they begin trading gold. Traders can open a demo practice trade account and learn how to trade with trading analysis using their demo trading account. Traders can then practice trading with these concepts on this demo trade account until when they gain enough knowledge and experience to trade profitably using this trading analysis method.

To do basic research, traders need to find out about the different financial reports. By using a financial calendar that can be found online, traders can stay informed about upcoming news events. Then, they can learn how to use the financial reports to know which trade to make based on what the news says. Traders who choose to use basic research will need to practice on their demo trading account. This way, they can get enough practice understanding these financial reports and know how to trade them for a profit.

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Gold Broker