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Does Gold Perform Better Than Other Assets in Times of InflationGold Price Against Inflation When the economy is experiencing inflation, investors often turn to gold to help protect their assets. This is because gold does not suffer from the same devaluation as paper money in times of inflation. But does it always perform better than other assets? We analyzed data to see if that was the case and found that it depends on what type of investment you’re looking at. For example, stocks generally do well in periods of inflation, while bonds perform poorly in these same cases. What is inflation? Inflation is defined as an increase in the overall price of goods and services. To better understand what this means, consider a loaf of bread. If it costs $2 to buy a loaf of bread today, but tomorrow that same loaf costs $2.50, there has been inflation because the price went up. What are the different types of investments? Investments are opportunities to save money and grow wealth. But what exactly is an investment? A traditional investment is a transaction between an investor and a company or individual. The investor provides capital in exchange for shares in the company’s stock, bonds, property, commodity futures, forex trading aand more. When deciding what type of investment you should make, there are many options (gold is just one). In addition, there are several types of assets, such as stocks or bonds. Each of these investments has its unique characteristics and risk levels. Does gold perform better than other assets in periods of inflation? Stock Vs Gold As you can see, not all investments are created equal. The performance of investments in periods of inflation will depend on the type of investment. For example, stocks and cryptocurrencies are likely to perform better in times of inflation, while bonds are likely to achieve worse in recent years. If you’re investing long-term, gold and stock can be your best option because their price is subject to fluctuations that can predict most of the time. However, if you’re looking for a short-term safety net, gold and cryptocurrencies might provide some stability that other investments lack. Regardless of what type of investment you choose, it’s essential to have an overall plan for managing your portfolio to align with your goals and risk tolerance. Does Gold Always Perform Better Than Other Assets? It depends. The answer to this question is complicated because it depends on the type of investment you’re looking at. In this post, we’ll explore the pros and cons of investing in gold during periods of inflation. Gold has long been considered a safe haven asset for investors worried about inflation. This is because it doesn’t suffer from devaluation like paper money does in periods of inflation. However, studies have found that stocks and cryptocurrencies do better in high inflation like gold. One study found that “gold’s performance worsens when inflation rises above 10%.” And another study found that “gold does not protect against loss as well as stocks or bonds.” So while gold can be a good investment during moderate inflation, it may not always perform better than other assets during periods of too-high inflation. What Is the Best Investment When Inflation is High? Inflation can have a significant impact on investment performance. In this piece, we’ll discuss the different types of investments and how they perform in periods of inflation. There are five main types of investments: stocks, bonds, gold, cryptocurrencies, and cash equivalents. Each has a different risk level and potential for return. While there’s no guarantee that any investment will perform well during a period of inflation, stocks, in general, have been doing better in times of high inflation in recent years. This is because historically, they tend to rise in value faster than other investments in this situation. Bonds also increase in value during periods of high inflation, but their downside is much higher because they drop quicker when the economy is struggling with recession. Gold and cryptocurrencies have been rising during recent years. It’s because of higher inflation and global concerns about coronavirus and global trade deficits. But gold is more stable than cryptocurrencies. So you can easily predict the gold price, whether it is a bit hard to predict the cryptos. Cash equivalents typically stay at their same levels or fall when the economy enters a recession under periods of high inflation. This is because cash equivalents are less volatile than bonds and stocks due to their equivalence with money which never loses its value. What is the difference between stocks and bonds? If you’re thinking about investing in gold or other commodities to help protect your assets, you need to know where to put your money. Certain types of investments perform better than others, depending on the economic climate. For example, stocks generally do well when inflation is on the rise. That’s because investors are earning more for their money as prices rise. That means stocks often beat bonds in periods of inflation. Like during the Great Recession, stocks also tend to outperform bonds regarding high unemployment rates. On the other hand, Bonds don’t fare as well during periods of inflation and tend to perform better in cases of low unemployment. As far as gold investment goes, it does not always beat other investments like stocks and bonds. Gold performs worse than these investments during periods with low unemployment but performs better than them during periods of high unemployment—like during the Great Recession. So, while you are an investor, you must consider the global situations and growth. If you see covid pandemic is increasing unemployment rates, then it is better to invest in gold. On the other hand, if you see only inflation rising but not employment, I suggest you invest in stock and gold together. Gold vs. Stocks, Gold vs. Bonds Gold is often seen as a way to hedge against inflation. In high inflation, the value of gold and other hard assets will be higher than paper money and other investments. But do stocks and bonds perform similarly? We researched data on stocks and bonds to explore this, comparing them to gold. We found no general rule for performance: While some types of investments do well in periods of inflation, others do not. It largely depends on what kind of investment you’re considering. For example, stocks tend to perform better than bonds when there is inflation because they are less sensitive to changes in interest rates or monetary policy. Conversely, bonds are more susceptible to these factors, so they typically perform worse during times of inflation. But gold always does better in most cases. But when the inflation goes over 10% in those cases, gold can’t perform well like stocks. But we should be concerned about the stock market because most of the stocks have been running higher in recent years. Every company has its profit limitations and people demands. So anytime the stock market can collapse. The Better Inflation Hedge: Gold or Treasuries? Many investors look to gold to hedge against inflation, mainly because it doesn’t experience the same devaluation as paper currency. But does it consistently outperform other assets? The answer is no. It depends on what type of investment you’re looking at. For example, stocks generally do well in periods of inflation, while bonds perform poorly in these same cases. This is because bonds are primarily invested in fixed-income investment vehicles, which have historically done very poorly during periods of inflation. Treasuries are also not the best performance during periods of inflation; they tend to outperform stocks only when the rate of inflation stays below 5 percent for an extended period. Otherwise, their value will be eroded by inflation and the higher interest rates that accompany it. But don’t worry! Gold’s performance can vary depending on many factors like the period (long versus short), the country (G7 versus developing economies), and whether or not there’s a global recession. So let take a closer look at how gold may work as an asset during times of inflation: Real interest rates drop in the inflationary environment, and gold and stock price go up. This is because central banks try to quickly for loans and reinvest in the economy. Can Bitcoin Also Provide Hedge Against Inflation? Bitcoin, the cryptocurrency that many people are now investing in, is often touted as a hedge against inflation. But does it always perform better than other assets? To find out, we analyzed data on four different types of investments: stocks, bonds, gold, and bitcoin. As you can see, each asset performs differently during periods of inflation. As you would expect, stocks do well in periods of inflation, while bonds perform poorly in these same cases. However, stocks typically outperform bonds because they’re less sensitive to changing interest rates. But what about gold and bitcoin? We found that gold fares better than stocks during periods of inflation (although not as well as bonds). Bitcoin performance depends on how people use it; if they use it solely as an investment, it performs well during deflation or inflation periods. On the other hand, if people are using it for transactions, then it performs poorly during periods of both types of economic instability. Conclusion Each asset has its unique characteristics. Therefore, investing depends on the environment, situation, global economic condition, inflation, and supply-demand. Such bond markets are not usually happening big moves. The gold market is again very stable; on the other hand, the stock market and cryptocurrencies doing quite well over the years. The crypto market is so volatile, many traders invest intraday in the hope of making a profit in a short time, and some investors stay away from investing in cryptos. Overall, the gold and stock markets are the best assets for investments when inflation rises. However, it has a definite boundary line, which should never be exceeded.
CAPITALCOM:GOLDEducation
by Gold_Trading_Expert
GOLD - Facts to have a true sense of gold trading 🔥What is gold forex trading? Gold forex trading is the term used to talk about the ways you can gain exposure to gold via FX markets. Instead of buying and selling the precious metal, or speculating on its price using futures, you can trade it as a dollar-denominated currency pair or via gold-linked pairs. As historically gold was used as a currency, it’s not surprising that it’s still an internationally recognised part of the forex market. It trades under the currency code XAU. Trading gold in the forex market can be a great way for currency traders to get exposure to the commodity and diversify their portfolio. Its stability when compared to other assets during global crises means it’s a popular hedge against inflation. Often, the commodity gets a lot of attention around large market-moving events when investors get spooked and rush into the metal as a safe haven. For example, amid the Covid-19 pandemic, governments and traders started moving money into gold to protect against losses due to inflation. Can you trade gold on forex markets? Yes, you can trade gold on forex markets using the XAU/USD currency pair. This is the spot price of gold, which tells you how much 1 troy ounce of gold costs in US dollars. Alternatively, you can get exposure to gold prices by trading other currency pairs that have a correlation with the precious metal – these include the US dollar, Australian dollar, South African Rand and Swiss Franc. Gold and the US Dollar Traditionally, the relationship between gold and the US dollar has been an inverse correlation. As investor optimism has increased, money has flowed out of gold and into currencies, while periods of economic concern have created inflows into gold away from higher-risk assets (like FX). However, it’s important to note that the USD isn’t the only factor involved in gold’s pricing. This means that sometimes the correlation between gold and USD isn’t so straightforward and doesn’t always move 1 for 1. Especially as there have been instances of the US Dollar being considered a safe haven, due to its use as a global reserve currency, which has seen the asset classes move in tandem. Gold and the Australian Dollar Gold and the Australian Dollar have an extremely tight relationship due to Australia’s position as the third biggest gold producer in the world. It contributed about $5 billion worth of gold each year. As such, gold has a positive correlation with AUD/USD. When gold goes up, AUD/USD tends to go up. When gold goes down, AUD/USD tends to go down. In fact, studies found that a 1% increase in the nominal gold price led to a 0.5% appreciation of the AUD/USD nominal exchange rate. Gold and the South African Rand The South African Rand is often correlated with Gold as South Africa is a large exporter of gold. So, when the gold price goes up, it’s thought that the price of ZAR will rise too. This was particularly true when the Rand first entered circulation, but the correlation is still present as the precious metal represents about 15% of the country’s total exports. You could trade this correlation through the USD/ZAR pair, which would in theory have an inverse relationship to the gold price. Gold and the Swiss Franc The Swiss franc has traditionally moved in line with gold, given that more than 25% of Switzerland's money is backed by gold reserves. The Swiss Frac is a fairly common proxy for gold. We saw this relationship in full force in early 2020 following geopolitical tensions between the US and Middle East – gold rallied to around $1560 per troy ounce and the franc followed to trade at intraday highs of $1.03. So, in order to trade gold, you’d be looking at the negative correlation it has with the USD/CHF pair: when gold price goes up, USD/CHF goes down and vice versa. Gold forex risk factors There are a few factors you need to consider before you trade gold on forex markets: Liquidity – the ease to which you can enter positions can fluctuate throughout the day. However, the average daily trading volumes of gold pairs tend to exceed all currency pairs, excluding EUR/USD, GBP/USD, and USD/JPY Supply and demand – like any market, when demand is up and supply is down, price rises, and if supply increases and demand drops, prices will fall. Half of the global demand for gold is driven by jewellery production, while another 40% comes from investors Market volatility – as we’ve mentioned, the volatility behind gold’s price is driven by its use as a safe haven. When other higher-risk assets aren’t performing, people move to gold. In contrast, when risk-on assets are strong, gold trading levels fall How to trade gold in forex To trade gold in forex, you need to go through a few quick steps: Open a City Index account or log in to an existing account Search for a currency pair in our platform Decide whether to go long or short on the price Enter your positions, attaching stops and limits as necessary Monitor and close your trade Not ready to trade live forex markets? Practise trading gold-linked currencies in a risk-free environment with a demo account. Can you day trade gold in forex? It is possible to day trade gold in forex, but it’ll depend on the market conditions at the time because gold is a relatively stable asset most of the time – until there’s a period of economic uncertainty and more volatility. As XAU/USD tends to trade in a range , reaching previous highs or lows over time, strategies that take advantage of these moves tend to be more popular. By identifying these buy and sell points you can, for example, open a position on gold when it’s trending up and target a known level of resistance as your sell price. Compared to day trading, this is a relatively low-risk strategy and not designed for quick profit but benefits from the more reliable XAU/USD price movement. Gold forex trading times Gold forex is a 24 hour market, but peak trading volume is usually found in New York trading hours, which are between 1pm to 10pm (UTC). Trading gold markets during peak activity will offer higher liquidity and lower volatility, making them good targets for safe-haven positions. Alternatively, trading gold in lower volume hours can mean less liquidity but provides the extra volatility needed to execute shorter-term strategies. hope best of luck to you guys
TVC:GOLDEducation
by GentleGoldenEngine
4
HOW-TO: Cosmic Cloud #1📡 INDICATOR Cosmic Cloud 👩‍🏫 HOW-TO CONTENT This how-to shows that even price movement during major events like global market crashes adhere to the indicator levels. ✅ POINTS the price drop starts after reaching a resistance level (top-left chart) or the price drop is confirmed by a downward breakout from one of the support levels the 2020 stock market crash (👑) reaches its lows at various Cosmic Cloud supporting levels 🔔 USEFUL ALERTS Resistance Channel Re-entry ↓ Basis Test ↓↑ Support Channel Entry ↓
TVC:DJIEducation
by cosmic_indicators
HOW-TO: Cosmic Channel #1📡 INDICATOR Cosmic Channel 👩‍🏫 HOW-TO CONTENT This how-to covers the price breaking through all the support or resistance channels. This is a likely signal that the price is about to begin a volatile move in that direction. ✅ POINTS price breaking through all resistance channels (☝️) signals that a volatile bullish trend is about to begin price breaking through all support channels (👇) signals that a volatile bearish trend is about to begin 🔔 USEFUL ALERTS Resistance Channel Break ↑ Support Channel Break ↓
INDEX:BTCUSDEducation
by cosmic_indicators
GOLD TRADING GAUGE | EASY TO OBSERVEThe 'Why' Insight: The other way to keep your money is to put it in a savings account or into bonds that aren't very risky and will pay you interest. People who invest in gold lose money when interest rates go up because the yields on savings accounts and bonds also go up, which makes gold less appealing as a long-term investment. It is very important to look at the interest rate when you are trying to figure out how much gold is worth. Storage costs and insurance are two more things to think about. The price of the commodity will be the sum of all of these things. Thereafter, how the price moves depends on things like the movement of the US Dollar and things like demand and supply. Warning: This is the broader view, not the detail spesific method for entry.
TVC:GOLDEducation
by TradingCocktail
RISK MANAGEMENT - WHAT WOULD YOU CHOOSE? 🤑🤑🤑🤑🤑 Hi traders! Introduction - I was reading a few articles around risk management, the psychology off a successful trader & common mistakes traders who fail make. I stumbled across a concept which I thought resonated with me and made me really think about my psychology towards risk management and I thought I would share it with you. I hope this is just as fascinating to you as it was to me, and it has some intrinsic value to you. Why is risk management important in Trading? Trading in general can be regarded as a high-risk activity compared to not trading at all which would be regarded as having virtually no risk to any principal money you may have. For this reason, I would regard risk management to be the most important concept in any type off trading regardless off strategy, instrument & individual ability. Let’s look at the definition of risk management: “Risk management involves identifying, analyzing, accepting and/or mitigating trading decision uncertainty.” – Yahoo Finance To summaries we know trading is risky, therefore risk management is a tool to control that risk & staying in control is the most important thing that you must never forget. This is going to be the reason why the almost 90% of traders fail and why only 10% manage to achieve some sort off “success” from trading and its all to do with risk. Now I know for sure we can all think back to a time where we fell into this trap, but the important thing is learning from that lesson. 90% of traders will lose more on their losing trades than they win on their winning trades and that’s why they are not in the 10% of “successful” traders Understanding decision making from winning & losing Here’s the way it goes: Say I offered you a very simple wager and that wager was based on the flip of a coin. All you must do is predict whether the coin will land on heads or land on tails. The same principal activity off trading in its most basic form. Will price go up or will price go down? A simple 50/50 chance off being right regardless of what strategy you use right. Here comes the interesting part, the part that changes everything. The wager Say I decide to give you two choices, we will label these option A and option B. Now remember we already know what we’re doing is risky, but our aim is to maximize profit and minimize losing and put our money to work. Now thinking logically Option A is the one which maximizes our profit (which is our goal). That doesn’t make Option B wrong however as this option means you are guaranteed to make a profit you just aren’t maximizing what you could make. You will not be surprised that in this scenario then more than likely the most popular option is option B. Guaranteed profit with little to no risk. That’s a thumbs up from a risk management perspective. Here’s where I’ll highlight why 90% off traders fail. Let’s turn this scenario upside down and on its head and instead of talking making profit lets talk about making a loss. Now before I fully explain it lets put it into the concept of trading. Option A – A trade is going against you. Its about to hit your stop loss and you decide that you’re going to move your stop loss into further loss as there is the potential that you can get back to breakeven and you hate losing money. Option B – A trade is going against you again. Its about to hit your stop loss and you decide that you would rather take the guaranteed loss off -£400 rather than take the risk your loss could exceed. In the second scenario we all know that option B would be the most sensible option as it means we are managing our risk and staying in control of the situation. Remember as I said that’s the most important thing, stay in control. However unlike in scenario one where we are likely to choose option B when it comes to making money in scenario 2 when it comes to losing money, we seem to become risk driven and would rather roll the dice on losing more money for the chance to get out without losing anything at all rather than take the guaranteed risk. The scenario shows the reason I think traders lose more than they win and by understanding the simple concept you can give yourself the best possible chance of long-term success. Remember our goal is not to be right in forex, it is to make money. To make money we need to limit our risk and stay in control. The best way to combat this and to remove the emotional influence is to have predetermined targets. Know where you will get out of a trade; win or lose & don’t allow anything or anyone to influence that pre-determined decision. Hope this was insightful for you and thanks for reading! The Fx Chartist
Education
by TheFxChartist_
2
XAUUSD Wyckoff Accumulation - Don't get caught out!Illustrated above is a break out of an accumulation set up which should see gold recapturing the price levels it fell through last week. The immediate upside price objectives are 1802,1811 and 1828. Last weeks decline found preliminary support (PS) at 1794. This temporary relief is usually followed by what is known as a selling climax (SC) which took gold down to 1786. We saw first signs of exhaustion at this stage confirmed by the automatic rally (AR) back towards the preliminary support (PS) , before a secondary test (ST) saw price retracing back towards the climax lows. What follows next usually leaves an asset temporarily range-bound and is characterised by several rallies and secondary tests; the highest and lowest price points outlining the support and resistance levels for the range. An initial a sign of strength (SOS) signified that a bottom had occurred with buyers emerging. This was subsequently followed by another sell off which often breaks the selling climax (SC) lows briefly. A key indicator to look out for at this stage is volume. Lower volume than during the initial selling climax (SC) indicates a possible (Spring) with confirmation of the Spring being further strengthened by another attempted sell off to the last point of support (LPS) which witnesses price bouncing back off the support line identified during the earlier stages. From this point onwards, price is expected to retrace back up and break out of the range targeting previous levels of distribution. Whilst the longer term technicals and sentiment remain bearish, bulls have the near-term technical advantage. A daily close below 1785 will be required to change this near-term outlook. We can expect for gold to retest the 1828-1834 price level again. A successful break of this could lead bulls back up to the 1855-1860 level. I hope you found this useful, do leave your thoughts in a comment below. As always, a 'like' and 'follow' provides encouragement to share further ideas. Thank you for taking the time. BeyondEdge Your Edge Is Your Perception. Go Beyond.
FOREXCOM:XAUUSDEducation
by BeyondEdge
7
Correlation of Different Markets with Forex: CheatsheetOne of the biggest things you should understand as a trader is prices don’t just go up and down (well, maybe on a really small timeframe they’re more chaotic). They’re usually backed by some actions, data and things happening in other markets. This all creates general economic tendencies. But how do we know what affects dollar/currency pair and how? Well, here is a quick cheat sheet for that case. More importantly with an explanation of why. 😊 USD and Gold (negative) Investors prefer to abandon the dollar in favor of gold during times of economic uncertainty. Gold, unlike other assets, retains its inherent worth. Gold and NZD/USD (positive) New Zealand (number 25) is a major gold producer. Gold and AUD/USD (positive) Australia is the world's third-largest gold producer, exporting around $5 billion worth of gold each year. Gold and USD/CAD (negative) Canada is the world's fifth-largest gold producer. When the price of gold rises, the pair tends to fall (CAD is bought). Gold and USD/CHF (negative) Gold backs up more than a quarter of Switzerland's reserves. As gold prices rise, the pair falls (CHF is bought). Oil and USD/CAD (negative) Canada is one of the world's top five oil producers. It exports 5..5 million barrels of oil per day to the United States. As oil prices rise, the pair falls. Bond Yields and USD (positive) Higher bond returns attract greater investment to a country's economy. This makes its native currency more appealing than the currency of another economy, resulting in lower bond yields. Here it’s more about looking out for bond differences between countries. For instance, if bond difference between UK and United States goes down, this will cause GBPUSD fall as well. Gold and EURUSD (positive) Because gold and the euro are both considered "anti-dollars," if gold prices rise, the EUR/USD may rise as well. USD and Stock Market (depends on the market situation, mostly positive) So, here is a little weird one. Strong stock market is an indicator of a strong economy. So as company gets stronger -> stock price goes up -> attracting more international investors to step in, who have to get local currency in order to buy a local stock -> this cases dump of other currency in favor of the currency we’re intending to buy the stocks with (in our case USD). Seems easy? On the other side, people from the local economy dump their dollar/bond holdings to acquire more stocks weaking the currency itself. That’s why it’s a complicated love story. This correlation is quite different depending on the volumes for both cases. Enjoy, family! But keep in mind that these tendencies change to some extent as the world economy shifts/develops. Make sure to always stay updated and observe on your own.
TVC:DXYEducation
by Investroy
13
Commodities - What are they and how do they work?This article is continuation to the series of educational articles on basic fundamentals in regards to particular asset classes. If you have not read our previous article on stocks, feel welcome to do so: In order to read the article click on the chart above. Commodities are basic goods used in commerce that are interchangeable with other goods of the same type. They are usually refined or used for production of other goods. Commodities can be traded privately or on public market exchange where they must meet specified minimum standards like quality, weight, type, etc. They are great speculative investments which tend to be ruled by cycles and interaction between supply and demand. Classification of commodities In order to distinguish between particular characteristics of each group, commodities can be categorized according to their type and origin. Commodities that are mined or extracted are called hard commodities (oil, gold, silver, etc.) while commodities that are grown are called soft commodities (wheat, rice, livestock, etc.). Though, commodities can be sorted even further into smaller sub-categories. For example, metals can be divided into industrial metals (copper, nickel, iron, etc.) and precious metals (silver, gold and platinum). Additionally, the agricultural sector can be divided into livestock and grains; and the energy sector can be divided into oil, coal and natural gas. Other commodity sectors can be subcategorized in the similar fashion. Raw materials Primary commodities which are unprocessed and serve as input for production of other goods are also called raw materials. Raw materials involve, for example, crude oil, copper, iron, wheat and corn. Commodities exchanges include: Asia Pacific Exchange (APEX) - Singapore Chicago Board of Trade (CBOT) - United States Chicago Mercantile Exchange (CME) - United States Dalian Commodity Exchange (DCE) - China London Metal Exchange (LME) - United Kingdom National Commodity Exchange Limited (NCEL) - United States New York Mercantile Exchange (NYMEX) - United States Shanghai Gold Exchange (SGEX) - China Correlation Some commodities tend to show correlation with other assets. Such correlation can be positive or negative. Positive correlation means that two assets behave in a similar way. For example, when gold rises then mining stocks rise as well. Contrary to that, negative correlation describes such behavior in which assets move in the opposite direction to each other. For example, when USD/EUR rises then gold in USD tends to decline. Illustration 1.01 Illustration above shows the monthly chart of USOIL. It also shows USDEUR (orange line). Negative correlation between these two assets is observable. When USDEUR falls then USOIL tends to rise. Participants, spot market and derivatives market Commodities are great anti-inflationary assets which are often sought by producers and speculators alike. Producers tend to use commodities with purpose to hedge their risk; furthermore, they often demand delivery of physical goods. Speculators, instead, try to exploit volatile price movements in commodities with the goal to profit from it. Commodities can be bought and sold through the spot market or derivatives market. Spot market simply means buying or selling cash positions while derivatives market involves investing in futures, options, ETFs, etc. Seasonality Some commodities are prone to seasonal cycles which means that they tend to show the same or very similar behavior based on a particular calendar season. For example, in some countries, production of a certain crop may vary during the wet season and drought season. Similarly, heating prices tend to increase during the harsh winter as opposed to during the hot summer. Concept of seasonality is also applicable to commercial and industrial trends. DISCLAIMER: This content serves solely educational purposes.
OANDA:XAUUSDEducation
by Tradersweekly
7
How to win your continuations and avoid bad tradesHi, Those who follow me know that I only trade with pure price action and volume . If you are someone who also hates the subjectivity of indicators then you'd find this interesting. This is what I look for before taking continuation trades, keep in mind that what's important when you trade like that is the concept of weak high/lows and strong highs/lows. When you find those points all you have to do is trade with the trend then find the last point of supply/demand and take your entry. Hope this helps.
OANDA:XAUUSDEducation
by MFX_Trading
1
How can I use this trading template? Today I will share a template that may be really helpful to understand some key concepts: First concept: Only look for setups IF the price has reached a major level. In this example, we can see a bearish movement that has reached a weekly level. Why is this relevant? Because if we are working with relevant levels that had worked in the past, we increase the chances of being right regarding an expected movement. Alright, does this mean that I should buy there? ABSOLUTELY NOT; let's go to the second concept Second concept: Once the price has reached a major level, wait for confirmations. Waiting for confirmations means that we have other levels to pay attention to that may provide us solid insights regarding what the price may do next; in this case, we have a descending trendline. A bearish trendline tells us this: Below the line, assume the bearish trend continues; above the line, assume that a possible change in direction may happen. Cool, now is time to buy, right? ABSOLUTELY NOT; let's go to the third concept Third concept: After the breakout of a major structure, WAIT for a correction Most of the time, we will tend to observe a correction after a big structure breakout. That type of behavior can be understood on this template after the breakout. There is a correction happening that we will generally be able to define inner waves; in this case, we have an ABC pattern. Corrections are our final confirmation before engaging with a setup. The position where we tend to observe corrections are in the following places: On the edge of the broken structure / Above the broken structure / On the first minor level after the breakout. Great information! Can I trade now? Yes, now we can define our setup, which takes us to the next concept. Fourth concept: After waiting for several confirmations, we can think about developing setups on the breakout of the corrective pattern (entering above B tends to be an excellent entry-level). Stop loss should always go BELOW C or, in other words, below the last local support zone. Take profit levels can be defined using the next relevant level we may have; these are not the minor levels; I'm speaking the next resistance zone with the same hierarchy as the support we started thinking on bullish opportunities. Fifth concept: This is a template mainly for Swing traders; that's why I wanted to show what to expect in the process between our execution and the take profit level. We may see one or multiple corrections on the way, most of them happening on minor levels. Of course, real trading is much more complex than this, but templates are a good way of understanding concepts and seeing how we can apply this to real market conditions. Another important item I want to highlight is that this type of system tends to have a win rate of around 50%. If we only engage with setups that provide a risk to reward ratio higher or equal than 2, then that's all you need to become profitable. Thanks for reading; if you have any doubts, drop them in the comments, and feel free to share your opinion on this.
OANDA:XAUUSDEducation
by ThinkingAntsOk
7
GoldViewFX - STEP2 - HOW TO TRADE BLUE PRINT ZOOMED INThis is a follow up post from the previous post (SEE RELATED IDEAS POST BELOW) on zooming out to identify historical ranges and moving across the levels to the current range. This post now zooms into the current range, with the historical range highlighted. We then draw our Goldturn support and resistance levels and are now able to use EMA5 indicator to trade these levels. We also add other analysis and indicators alongside this to further strengthen our move. Hope this was useful, please don't forget to like, comment and follow to support us. GoldViewFX XAUUSD TOP AUTHOR
OANDA:XAUUSDEducation
by Goldviewfx
TRADING PSYCHOLOGY | Common Traps You Must Know 🧠💭💫 Hey traders, Trading psychology plays a very important role in a learning curve of a trader. In this post, we will discuss common biases and traps that every struggling trader is occasionally facing. ⚓️Anchoring Bias People rely too much on a reference point from the past when making a decision for the future - they are "anchored" to the past. Imagine you spotted a great trading opportunity & made a nice profit. Encountering a similar setup in the future you trade it again. It turns out that you lose. Next time - same thing. The setup that initially brought you nice cash refuses to work. Even though the probabilities indicate that the identified pattern produces negative long-term returns, you keep taking that because you are "anchored" to the initial winner. 🙅‍♂️Loss Aversion This is when people go to great lengths to avoid losses because the pain of loss is twice as the pleasure received from a win. You see a great trading setup. You are 100% sure that it will play out. You open a trade and guess what? The market goes in the opposite direction. You can't believe that you are wrong. Instead, you decide to hold your position just a bit more adjusting your stop loss. And again, the market refuses to go in the direction that you projected. It is a vicious cycle that most of the time leads to substantial losses. ✅Confirmation Bias The confirmation trap is when traders seek out the information that validates their opinions and ignores any theory that invalidates them. You spotted a great long opportunity on GBPUSD. Checking the ideas of other traders on TradingView you consider only the ones that confirm your predictions completely ignoring the opposite ones. 👑Superiority Trap Many traders have lost large sums of money in the past simply because they have fallen prey to the mentality of overconfidence. Imagine that you caught a winning streak. You feel like the king of the world. You spend less and less time and reflection on each consequent trading decision that you make, you lose your focus. At some moment the reality kicks in and your gains evaporate. 🐮Herding As a trader, you should execute your own analysis & avoid the temptation to blindly follow the majority. Analyzing a EURUSD chart you make a conclusion that the market is bearish. However, then you see that 90% of the traders are very bullish on TradingView. Instead of following your own analysis, you decide to join the herd. These biases are common and most of the time we fall prey to them unconsciously. The more you self-reflect, the more you analyze your thoughts and actions, it would be easier for you to avoid them. Have your ever fallen prey to these traps? ❤️Please, support this idea with like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
25
Your Success Formula | What Drives a Big Change 🏔️ Hey traders, There’s a well-known Chinese proverb that says, “A journey of a thousand miles begins with a single step.” The one thing that prevents you from attaining your goal is hidden in your psyche, deep inside your soul. People usually look for shortcuts and want to accomplish their goals in one night. But the thing about long-term goals is that they can not be accomplished in a single day! It’s not like they require one huge, monumental effort to be achieved. The only way you’re going to accomplish something really big and ambitious – the kind of goal that will transform your life forever – is by consistently taking one small step at a time in the direction of your dreams. The importance of small incremental steps should be recognized by everyone, life is full of challenges, ups, and downs, but one should not lose hope or give up during the process. Failure should be considered as a learning point, an opportunity for growth. Be ready for a journey of thousand miles this year. Be ready to meet the chaos and unknown. That is the only way to evolve and be better. Remember that nothing is impossible to achieve unless you decide to do it at all costs. Do you agree with this quote? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
21
Your only as good as the assets you tradeThis is just a short blog post of a much longer idea! In a recent post we spoke about focusing only on assets that are in play for the day, even tough with day trading you can still make solid profits, especially on the tick charts, trading ranges, a trend will generate you much bigger and more importantly, easier profits. This is why it is vital to focus on assets which could generate momentum, because at the end of the day in day trading you are only as good as the assets you trade. Below you will find a chart of NASDAQ (left) and a chart of XAUUSD (right), one has moved significantly upwards while one was stuck in a whipsaw range which ended up breaking to the down side towards the end of the day on December 31st. Choosing to trade XAUUSD would be much easier to make a profit.
OANDA:XAUUSDEducation
by PrimedGroup
3
SUPERTREND AND EMA x2 Strategy for XAUUSD SWING TRADINGTools(Indicators) used: Supertrend Indicator from KivancOzbilgic no changes. EMA used twice. Set Length on first EMA at 20 change color to Blue (any you want but I will explain using the settings used). Set Length on second EMA at 50 change color to Yellow CHART 5 MINS and UP but under 1H. Preferred instrument is FXOPEN:XAUUSD Strategy:- We enter a trade upon confirmation of the following conditions. 1. When the supertrend suggests a buy. We confirm entry only when the blue line crosses the yellow from below. If both the conditions are true we place a buy order taking the previous lowest point as stop loss and profit at 1:1 2. When the Supertrend suggests a sell. We confirm entry only when the blue line crosses the yellow line from above. If both the conditions are true we place a sell order taking the previous highest point as stop loss and profit at 1:1. This is the strategy that I am using and I have been able to close 90% trades in profit. The strategy holds good almost every currency pairs and major cryptos. But I have not tried it on stocks. So reviews and suggestions are welcome to improve the strategy Please Like and Comment.... Disclaimer: The views expressed are for educational purpose only and do not constitute to trading advice. Please do your own research before acting on the views expressed herein.
FXOPEN:XAUUSDEducation
by GoldSiren
7
Using Stochastic RSI to trade Gold on shorter time framesFor the past 2 months I tested a scalping strategy using the Stoch RSI oscilator for OANDA:XAUUSD . Basically, it consisted in entering a position, short or long, whenever the Stoch RSI crossed the signal above (shorting) or bellow (long) the overbought /oversold zones with very tight SL, waiting until the Stoch RSI gave me a clear trend change signal. I tried several time frames for Gold and found that 15m and 30m worked the best. Bear in mind I tried this for stocks, Bitcoin and it didn't fit at all. Only with gold. And only with the stoch RSI, the RSI was almost useless. At first this strategy was providing me good results. I had a hit rate of up to 85% on shorts and and 50% on longs. I tried several explanations for this and best one I found is a combination of the following two: 1) gold was in a macro slight downtrend and even in very short time frames, the probability of being right shorting was higher. 2) gold (and everything?) tends to come down more decisively than up so the oscillators pick a more clear trend shift. 3) my psychology was stronger shorting, somehow I seem to be more "afraid" when longing, perhaps because of point number 2). I eventually 1) gave up longing gold 2) used less leverage to have less tight SL and the strategy seemed too good to be true. No one was mentioning this on ideas or chats and sometimes I felt like I had found some sort of cheat code. Fellow traders would write "it's going up" or "it's going down" and they were almost always wrong if the Stoch RSI didn't match. However, suddenly i stopped having clear signals, the market completely changed. Stubbornly and because I wanted to test it, I stuck to it, but it never worked again (so far). My conclusion is that for it to work, the price action needs to be in "oscillator" mode with gold trading sideways on 15/30 minute time frame with a range of more than 3-4$ between tops and bottoms. It's also wiser to follow the main trend and opting out on entering short or long positions against a main trend. Also, it is very important to check TVC:DXY and TVC:US10Y in real time. (right now those two indicators are much more relevant to me than stoch RSI). I know for many more experienced traders the above idea might seem very obvious or naive, but I'm learning every day and I though I'd share my experience. Feel free to comment and happy trading to all.
TVC:GOLDEducation
by Aguia7777
1
Breakout Trading | 7 Steps to Follow 📝 Hey traders, Breakout trading is one of the most popular trading strategies. Being quite simple in theory, it remains quite complex and complicated in practice. In this post, we will discuss 7 steps every breakout trader must follow. 💬And just in brief about a breakout trading itself: this method aims to spot a key level (it might be horizontal support/resistance or a trend line) and then to trade its occasional breakout assuming that it will trigger an impulsive move. 1️⃣No surprise, the first task of a breakout trader is the identification of key levels. Preferably these levels should be spotted on weekly/daily time frames. 2️⃣Once key levels are spotted, a breakout trader should patiently wait for the test of one of those. His goal is to wait for a breakout. In that step, many traders fail. The problem is that in order to confirm the breakout, one should have strict & reliable rules to follow. The rules that describe a confirmed breakout. *I apply the following rule: the breakout of a level will be considered to be confirmed once the candle closes above/below the structure on the highest time frame where the structure is recognizable. 3️⃣Once the breakout is confirmed, the next step is to wait for a retest of a broken level. Why retest? Simply because a retest gives a better risk to reward ratio for the trade. And even though there is no guarantee that the price will retest the broken level and because of that some trading opportunities will be missed, in the long run, retest trading produces higher gains. 4️⃣Opening a trade on a retest one should know the exact target levels. The levels where the profits will be taken. Again, newbies traders make a lot of mistakes on that step. Remember that your targets must be realistic, they must be based on closest strong structure levels, not on your desired returns. 5️⃣Also, a breakout trader should set a stop loss. And again, a stop-loss level must be safe, it must be set at least below/above a previous minor structure to protect you from stop-hunting. Stop-loss reflects the point where the trader becomes wrong in his predictions and where the trading setup becomes invalid. 6️⃣Once the trading position is opened and stop-loss & take-profit are set, one should patiently wait. There is no guarantee that the price will start falling/growing sharply after the breakout. The market may start coiling for a quite long period of time before it starts acting. Breakout trader must be patient not allowing his emotions to intervene. 7️⃣Lastly, one should remember that his exit points are stop-loss/take-profit levels. Stop-loss adjustment in case of a position drawdown, preliminary profit-taking, and target extension are your worst enemies. Be disciplined, don't be greedy, and keep your emotions in check. Of course, this 7-steps trading plan is not sufficient enough for profitable breakout trading. There are so many nuances on each step of the plan to consider. However, let this plan be your initial guideline: learn & follow that and with time, keep elaborating its rules until you become a consistently profitable trader. Are you a breakout trader? ❤️Please, support this idea with like and comment!❤️
COINBASE:BTCUSDEducation
by VasilyTrader
19
These few chart patterns will improve your trading!Hello everyone, Let's look at few of my favorite chart patterns that I use from day to day in my trading and analyses. These patterns appears in almost every asset, instrument and currency pairs in the financial market and stock market. Forex chart patterns are on-chart price action patterns that have a higher than average probability of follow-through in a particular direction. They have offer significant clues to price action traders that use technical chart analysis in their forex trading decision process. Each chart pattern has the potential to push the price toward a new move. Forex traders tend to identify chart patterns in order to take advantage of upcoming price swings. Forex trading patterns are divided in groups based on the potential price direction of the pattern. There are three main types of chart patterns classified in Forex technical charting: 🔹 Continuation Chart Patterns 🔹 Reversal Chart Patterns 🔹 Neutral Chart Patterns 1. Bullish Flag In the context of technical analysis, a flag is a price pattern that, in a shorter time frame, moves counter to the prevailing price trend observed in a longer time frame on a price chart. It is named because of the way it reminds the viewer of a flag on a flagpole. The flag pattern is used to identify the possible continuation of a previous trend from a point at which price has drifted against that same trend. Should the trend resume, the price increase could be rapid, making the timing of a trade advantageous by noticing the flag pattern. In this scenario a bullish flag can be a sign that the previous bullish move that occurred prior to this pattern is likely to continue in the same direction. Opposite can be said with the bearish flag. 2. Double bottom The double bottom is a reversal pattern that occurs after an extended move down. The pattern signals that the market is unable to break through a key support level, and thus is likely to move higher. This pattern consist of 🔹First bottom 🔹Second bottom 🔹Neckline Neckline represents a resistance level that forms after the first bottom. A daily close above the neckline confirms the double bottom pattern. A total break through the neckline may confirm a violation of this pattern, long positions can opened once price has closed above the neckline at times a successful retest of price to the neckline can confirm a strong reversal. The opposite of this pattern is the Double Top which is a sign of reversal in bullish market, signaling a strong move to the downside. 3. Triple Bottom A triple bottom is a visual pattern that shows the buyers (bulls) taking control of the price action from the sellers (bears) and that price is about to change direction to the upside. A triple bottom is generally seen as three roughly equal lows bouncing off support followed by the price action breaching resistance. The formation of triple bottom is seen as an opportunity to enter a bullish position. The triple bottom consist of: 🔹First bottom 🔹Second bottom 🔹Third bottom 🔹Neckline The opposite of the triple bottom is a triple top which can signal a move to the downside. 4. Head and Shoulders A head and shoulders pattern is a chart formation that appears as a baseline with three peaks: The outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal, while an inverse head and shoulders indicates the reverse. The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns, but does have its limitations. 5. Rectangle A rectangle occurs when the price is moving between horizontal support and resistance levels. The pattern indicates there is no trend, as the price moves up and down between support and resistance. The rectangle ends when there is a breakout, and the price moves out of the rectangle. Some traders like to trade the rectangles, buying near the bottom and selling or shorting near the top, while others prefer to wait for breakouts. 6. Symmetrical Triangle The symmetrical triangle pattern is a continuation chart pattern like Ascending and Descending Triangle patterns. This pattern is characterized by two converging trend lines that connect a series of troughs and peaks. The trend lines should be converging to make an equal slope. This pattern indicates a phase of consolidation before the prices breakout. 7. Ascending Triangle The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation. Because of its shape, the pattern can also be referred to as a right-angle triangle. Two or more equal highs form a horizontal line at the top. Two or more rising troughs form an ascending trend line that converges on the horizontal line as it rises. If both lines were extended right, the ascending trend line could act as the hypotenuse of a right triangle. If a perpendicular line were drawn extending down from the left end of the horizontal line, a right triangle would form. 8. Cup and Handle The Cup and Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. There are two parts to the pattern: the cup and the handle. The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right-hand side and the handle is formed. A subsequent breakout from the handle's trading range signals a continuation of the prior advance. The opposite of this is the Inverse Cup and Handle that appears in the bearish market and that act as a continuation pattern and sponsor move to the downside after the breakout. Friends if you enjoy this educational contents please do not forget to show your support with likes. Do follow me for more future contents like this.
FX:NAS100Education
by Forexintelligence_NA
Learn Top-Down Analysis | The Best Trading Strategy 🏆 Hey traders, 🔝Top-Down analysis is one of the most efficient ways to analyze & trade different financial markets. In this post, we will discuss the time frames to watch and the main steps to go through to execute a Top-Down trading strategy properly. Being a Top-Down trader your task is to assess the global market perspective and identify the zones, the areas from where it will be relatively safe for you to trade it following the trend or catching the reversals. ➖Weekly time frame shows you the price action during the last couple of years. It unveils the major zones of supply and demand and indicates the long-term direction of the market. Your task is to spot these zones and underline them. The strongest market moves most of the time initiate from these zones. At the same time, you must remember that on a weekly time frame the market is extremely slow. Being beyond the key zones 90% of the time, it takes many weeks, even months for the market to reach them. ➖Once you completed a weekly time frame analysis, the next on your radar is a daily time frame. Daily time frame shows you 1-year-long price action. It indicates a mid-term sentiment. And again, here your task is to simply identify the market trend and underline major key levels. *It is highly recommendable to apply different colors for highlighting weekly/daily levels. Completing weekly/daily time frame analysis, your task is to set the alerts on at least two closest support/resistance clusters. You must patiently wait for the moment when the price reaches one of them. Once the underlined key level is reached, you start the analysis of intraday time frames. ➖The intraday time frames on focus are 4H/1H. Your task here is to spot the price action/candlestick patterns. With such formations, the market unveils its reaction to the key level that it is approaching. You are looking for a pattern that confirms the strength of the level. Spotting the pattern you are looking for a trigger to open a trading position. Most of the time it is a breakout of a trend line or a horizontal neckline. The breakout confirms the willingness of buyers/sellers to buy/sell from the underlined support/resistance. Only then a trading position is opened. Of course, in practice, Top-Down analysis is very complex and many things and concepts must be learned in order to apply that strategy properly. Follow the steps described in this post, learn to identify key levels and recognize the price action patterns and you will see how efficient this strategy is. Do you apply a Top-Down trading strategy? ❤️Please, support this idea with like and comment!❤️
Education
by VasilyTrader
33
What Type of Trader Are You? 🤔 Hey traders, In this post, I decided to make a comparative analysis of three main trading styles: scalping, day trading, and swing trading. We will go throw the main pros and cons of each approach and discuss common misconceptions. 🏃‍♀️🏃 Let's start with scalping. I guess many of us were impressed by videos on youtube showing how a guy makes thousands of dollars applying a simple scalping strategy. Some of these videos get millions of views and excitement from the audience. No surprise the majority of newbies start their trading journey with scalping strategies. Practicing some of them and trading on a real account, these traders suddenly realize that the youtube videos barely reflect the reality of scalping. Scalping requires being extremely reactive, making trading decisions quickly, and constantly staying focused. Moreover, it turns out that this trading style is extremely risky, and occasional losing streaks become an essential part of the process. A pro scalper usually opens dozens of trading positions per day and manages many of them simultaneously. Even though it is a fact that a solid scalping strategy is a true cash machine, the constant pressure and high level of stress make many traders leave that game blowing their trading account. A true scalper is a guy with iron nerves and a sharp mind. It takes many many years to become a person like that. 🚶‍♀️🚶Intraday trading is a bit simpler. While quite often scalping gives a trader just a couple of minutes to react and make a trading decision, intraday trading gives the hours. Such a trading style is slower, the intraday perspective is not that chaotic and irrational. It takes many hours for the trading setup to play out making the trade management process not that time-consuming. Moreover, intraday trader tends to open much fewer trading positions than a scalper. Analyzing primarily 4h/1h time frames less trading setups meet the entry conditions. That primarily affects the potential gains though. Lesser you trade, the less money you make. I consider myself to be an intraday trader. Trading full-time of course I was trying different scalping strategies, but I must admit that I can’t make the decisions that quickly, I can’t constantly hold so many active trading positions in my mind, I need some time to think, I need some time to do other things, I want more freedom. For that reason, intraday trading is my choice. And let me be frank right here: I am not trying to say that intraday trading is simple, it is SIMPLER than scalping still remaining extremely complicated to master. 🕴🕴 If you want trading to become your side income if you have a full-time job and just a couple of hours per day for charting, I believe that intraday trading/scalping are not appropriate for you. In your situation, I would consider swing trading. Swing trading is extremely slow. Being primarily focused on weekly/daily time frames a swing trader tends to hold trading positions for weeks, sometimes even months. Moreover, it takes many days for a swing trading setup to form and the market gives a trader much time for reflection. Of course, that primarily affects the potential gains: I believe that among the 3 trading styles that we discussed, swing trading generates the lowest returns. Swing trader is the best starter for newbie traders. Analyzing higher time frames they can constantly follow the market and don’t miss the major moves. Just 1-2 hours per day are enough to follow dozens of financial instruments. Only by becoming a consistently profitable swing trader, one can try himself in intraday trading. Working with hundreds of struggling traders from different parts of the world I realized that the majority has the inverted perception of scalping/intraday/swing trading. I hope that this article will shed a light on that topic. What trading style do you prefer? ❤️Please, support this idea with like and comment!❤️
OANDA:XAUUSDEducation
by VasilyTrader
38