Many Singapore traders like trading Gold. In this article we will discover a simple and effective gold trading strategy that any trader with any deposit may use and make over 1000 pips in a trade.
Trade gold following EUR/USD currency pair.
This gold trading strategy is based on following one of the most popular and important currency pair EUR/USD. There is a high probability that Gold is following the price movements of EUR/USD in a small time frame charts. Typically the repetition of the price movements is implemented with a delay of few minutes. Thus watching EUR/USD may give you signals for opening a similar position on the yellow metal. As mentioned above in this gold trading strategy we use small time frames like M5 or M15. Trading time is the European and American trading sessions.
The step by step guide.
A. Open the chart of Gold/USD and EUR/USD for the same time frame. You can see the charts for both instruments in different windows or use a special tool that might be available in your trading platform that allows you to see both instruments marked by different colors on the same chart window. The second option is much more comfortable and makes trading simpler.
B. We are watching the EUR / USD. As soon as we see an increase in volatility and a price takes a certain direction (about 40 points or more), we look at the GOLD/USD. If the metal is not moving yet we are opening a trading position in the direction of EUR/USD. Most often, after a few minutes or so, the metal begins to move in the same direction as the EUR / USD.
C. Trader must watch the open position. We don’t set a TakeProfit, hoping to close the trade manually with a profit after we get a signal for closing the transaction. StopLoss set at a distance that is enough for a position to stay open on small pullbacks. At the same time keep in mind that gold is quite volatile instrument, means, SL shall not be less than 1000 points.
D. Position closed after the candle of Gold/USD “caught up” the candle of EUR/USD. As a rule, the profit you may make in a single trade using this gold trading strategy is from 1000 and more pips.
We recommend all Singapore Forex traders to trade small lots when using this trading strategy for gold, taking into the consideration the high volatility of the yellow metal. This gold trading strategy is proven by many traders during many years. It is extremely simple and may be used by the beginners in Forex trading.