Trading XAUUSD Using News Strategy

One of the trading strategies that can be used to trade Gold that's borrowed from currency trading is the Forex News strategy and for XAUUSD trading we can call it Gold News Trading Strategy.

Economic News reports often evoke strong moves in the currency trading market and also Gold trading market because XAUUSD is transacted against the currency USD. These moves create a lot of opportunities for trading for the break out traders who look to trade the shortterm market moves.However, not all the economic reports are tradeable, some economic reports have more impact than others & only those that have a considerable effect on the price movement of XAUUSD against the USD can be traded and transacted using this news trade strategy.

The Economic News Reports from USA will be used to trade when using this strategy. The news data reports coming From US can be found on the schedule Economic Calendar, This Economic Calendar is provided online by online brokers & also the other online trading services providers, traders can search for this Economic Calendar online.

By analyzing the Economic Calendar schedule of data news data reports traders can determine the significance of the upcoming news reports to identify if the news data reports are worth trading or not based on expected volatility of the news data reports. These Economic Data News Data Reports are marked & denoted in terms of their significance, there are three levels of significance and these are: RED, ORANGE and GREEN. Most Significant News Report is Marked RED in color, the least significant are marked & labeled in GREEN while those reports marked in ORANGE are in between.

The only economic news reports that traders should focus on in trading are those that are marked in RED & those marked and labeled in color ORANGE. Traders shouldn't trade the GREEN ones.

General Approach to News Trading Strategy

There are 2 general approaches which can be used when it comes to news trading XAUSUD.

These 2 methods are:

Trading the Break Out Channel
Interpreting the Fundamental News Data Reports

Trading the Breakout Channel

Gold traders will set a buy stop pending order sell stop order above and below the Gold price respectively. These orders will be on both sides of the price so that when the Economic News Report is released one of the orders will probably be hit and if price continues moving in that particular direction because of this news report then the trader will make short term profits from this move.

However, because of the volatility caused by news reports both these orders might be hit both within a short period of time which means that a gold trader can make a loss in one of the open positions or in some cases both of these trading orders.

Analyzing the Fundamental News Reports

XAUUSD traders can predict the most probable direction of Gold by looking at the News Calendar Fields labeled and marked as Forecast and Previous. These 2 figures are then compared with the Actual News Report that is released to give an idea of the next likely direction of the price move.

Because XAU is traded against the USD - XAUUSD, the only Fundamental News Reports which a xauusd trader will be watching and looking out for are the reports from the US.

These Gold traders will watch the news announcements and pay close attention to the Actual news info that is reported - closely monitor the economic figures and numbers.

If the numbers released come as a surprise to the upside of the USD the traders of Gold will short XAUUSD (Gold) - when traders sell XAU they'll simultaneously be buying USD at the same time.

If the numbers released come as a surprise to the down-side of the USD the traders of XAUUSD will buy Gold (XAUUSD) - when traders buy XAU they will simultaneously be selling USD the same time.

Traders also will know and analyze when to trade and when not to trade based on if the Actual news reports are close to what the forecast was or not.

For these news traders the most crucial thing to know is that analysis of the previous news data report, the forecast and the actual news data report shall be analyzed and used to identify whether to open a trade position or not & what direction to open the trade transaction in.

Because many traders will be positioning themselves to trade XAUUSD when these news data reports are just about to be released or shortly after the news data reports have been announced, it means that these news data reports will cause a lot of price volatility that will provide traders a good opportunity for trading. News traders can then learn how to best position themselves and their trade positions when trading during these economic news reports by learning more about these 2 news trading methods and doing some practice on their Gold demo demo account.

A Gold news trader will maintain a schedule of all the US economic news announcements using the Economic Calendar. This calendar contains a timetable of the schedule of when the news reports will be released and also the previous news reports and the forecasts of these news announcements. These economic calendars will keep this schedule & display it well in advance and this way a xauusd trader will be able to know when there are upcoming economic news data reports.

One will keep this schedule before the news are released and also use the same News Calendar to get the news info after these reports are released, the economic calendar also will be updated in realtime.

The Economic Calendar is compiled by Financial Analysts & Economist who study the fundamental news reports and economies of the world. By having this Economic Calendar traders can schedule when to trade the economic data well in advance. To find a copy of the Economic Calendar traders can search online for "FX Calendar" or "News Calendar" and traders will find a couple of these trading calendars hosted online on various online Gold and Forex broker web-sites or other FX trading sites.

About Economic Calendars

An News Calendar will generally have 3 values:

Previous Reading Forecast Actual News

Previous Reading - This piece of the data shows the previous value or reading of a previous economic news data reports. Most reports are in the format of numeric numbers or percentages.

Forecast - Forecast illustrates the value for the news report that economic experts predict for that specified news report. This value is forecasted way before the date of the economic release. Economic and Financial and Economic Analysts will put across their forecast data.

If the forecast number is better than the previous and prior for USD, traders sell Gold
If the forecast number is worse than the previous for USD, traders will buy XAUUSD

Actual News Data Report

This is what will determine if there will be a big price movement or none at all.

If the actual info release is same to the forecast, then there will not be much movement in the prices of XAUUSD, this is because Gold traders anticipated this info and have already traded and transacted the news reports even before the actual info report was announced.

If the actual news release is not the same as the forecast, this will come as a surprise to the traders, if the forecast and actual info release isn't the same then, the traders will have to adjust their trade positions accordingly and this will cause a market reversal in the in the opposite trend trend trend trend trend trend trend direction.

If likewise the actual info reading was way better than expected, then the Gold price will continue further towards its direction and gain further energy towards that direction. Likewise if the actual news report is worse than the predicted data, the price movement also will continue in the same direction as that of before the news release and this time gain more energy & move further towards that direction.

Example:When the new information is released then it has impact on the market only if it's different than expected. If the information is as expected then it has no impact on a currency because the information is already available to the public and has already been taken into account.

In order to use fundamental analysis when analyzing news announcements, you should first be able to know market trading fundamental indicators. Economic calendar containing all the fundamental indicators is developed by economists. Economists also make use of this Economic Calendar to predict different news data reports. These predictions are offered by market analysts. This can have great impacts on the market price. Gold Traders will watch out for news announcements that have a great impact on the financial markets and use these data reports to adjust their trade positions.

When are America economic news data reports released?

8:30 am and 10:00 am EST

America Fundamental Economic News Data Reports are released/announced between 8:30 am and 10:00 am EST, Gold traders can schedule and time to follow and trade these news data reports during this time of the economic news data release.

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