Two Golden Rules in GOLD (XAU/USD) Trading
- When there is a strong trend begins, we open trades that follow the trend.
- When the GOLD is in the sideways of the Ranging Market, we trade reversal.
To capture the movement of a strong trend, we have to refer to a bigger time frame (H4 & D1 charts only). The combined use of BB (Bollinger Bands) with Parabolic SAR works well on XAUUSD to determine whether the trend is beginning. The average range for a trend to complete is about 200 - 300 pips (referring to the H4 chart) and 600 - 900 pips (referring to the D1 chart). The SLTP (Stop Loss & Take Profit) in pips can be set with a ratio of 1:2. For example, if your TP is 600 pips, then your SL can set to be 300 pips.
To capture the movement of range, we may be referred to the shorter time frame, M15 & M30 charts. Those commonly used Reversal Signals can be applied on XAUUSD when it is in the ranging condition. The average range for a ranging to complete in one circle is about 30 - 60 pips. The SLTP in pips can be set with a ratio of 1:1. For example, if your TP is 45 pips, then your SL can be set to 45 pips.
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