Gold Introduction - XAUUSD Trading Online Introduction to Gold Trading

Gold online trading is gaining popularity among online traders. XAUUSD is one of the trading instruments provided trading online that a gold trader can choose.

With this popularity it means xauusd as a financial instrument is liquid enough to be transacted on the online markets. Because of the many traders are now trading this metal online it means there is always someone willing to buy or sell their gold contracts at any time of the day when gold trading market is open.

This liquidity has also led to setup formation of trends in the market price movement of gold. These trends mean that gold can be interpreted using analysis & traders can determine what direction the market price of gold is likely to move in.

Gold now is liquid enough to be transacted as a financial instrument in the online market and this has led to many brokers providing gold as one of the financial instrument that traders can trade through the broker's trading platform.

Main online brokers offering xauusd as a financial instrument which can be transacted are forex brokers. FX brokers have been providing forex trading services to traders because the online currency exchange trading market is the largest financial market and the most liquid. This is why currency prices move in trends - because of this liquidity. The currency traders who trade fx use trading analysis to analyze the direction of these market trends and then place trade transactions on the currency market so that to make profits from this price moves.

Now that gold has gained a lot of popularity, xauusd gold prices now also form trends which can be traded and analyzed. This liquidity in xauusd has led to the setup formation of these market trends. The liquidity also means that there are enough traders willing to buy or sell at any time when the gold market is open.

The chart below illustrates the market price chart of gold. Traders will trade gold using this price chart.

Gold Trading Introduction - Gold Trading Online Introduction to XAUUSD Trading - How to Start XAUUSD Gold Trading

XAUUSD Price Chart

About Gold Charts

From the chart above a trader can quickly determine the direction of the gold prices from the price movements.

The first part prices are moving upwards in an upwards trend, then they start to move down in a downwards market trend & then finally the market prices move upwards in an upwards market trend.

As a beginner trader who wants to trade gold you'll have to learn how to analyze and interpret these market movements.

For example on our chart above we use the Moving Average crossover trading system which is a combination of two moving averages and these 2 moving averages are used to display the direction of the price trend.

If both moving averages are moving upwards then the direction of the xauusd prices is in an upward trend. In an upwards trend a gold trader will buy gold and make profit as the market prices of xauusd continue heading upward.

The moving averages will also show when the trend is changing direction. In the example above when the two moving averages stop moving upwards & crossover each other this shows the upward trend has reversed & traders should close out all their open trade transactions.

After the MA crossed over each other the 2 averages then changed their direction & started heading downwards. In a downwards trend a gold trader will sell xauusd and make profit as long as gold prices continue moving downward.

In the above example there also the RSI. This gold indicator has got a center line marked 50, when this indicator is above the 50 center-mark prices are bullish, when RSI is above 50 center line it means that the prices are in general closing higher than where they open meaning the price movement is bullish. When RSI moves below 50 center-mark it illustrates prices are in general closing lower that where they open meaning that the market prices are bearish.

Technical Analysis of Gold Trading

In gold trading traders will use trading analysis & indicators like the ones shown above to determine the direction of the prices. After figuring out the direction of the market prices a trader then will open trades in the direction of the trend.

If the market trend is upward then a gold trader will open buy trades and if the trend is downward a gold trader will open a sell position.

Buying is known as going long and selling is referred to as going short.

Traders can make profit when the market is trending upward or downwards. When the market is trending upwards a trader will buy gold - this is referred to as going long. When the market is going downwards a gold trader will sell xauusd - this is known as going short.

Trading Gold Contracts

In the online market gold is transacted as lots, no physical gold is exchanged. When it comes to contracts - one xauusd contract is equal to 100 units.

If the unit used to measure gold is ounce, then one contract of gold that is transacted in the online exchange market represents 100 ounces of gold.

Gold Prices

In the chart above the price of gold is represented on the trading chart. The price of gold will also have two decimal points and this is the format used to quote the market price of gold.

Gold Charts

The historical prices of gold will be used to draw a chart. This price chart is then used by the online traders to determine which direction the trend is likely to continue moving in. Traders will analyze the chart price movement using technical analysis and indicators.

The gold chart is the main trading tool used to trade gold.

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