Best Chart Timeframe to Trade Gold
Multiple time frames analysis equals using 2 chart time-frames to trade Gold Trading - a shorter one used for trading & a longer one to check Gold trend.
Since it's always good to follow the trend, in Multiple Time Frame Analysis, the longer timeframe gives us the direction of the long term trend.
If the long term market direction supports the direction of the smaller chart time frame then the probability of being profitable is greatly increased. This is because even if you make a mistake the long term gold trend will eventually save you. Also if you trade with direction of xauusd market, then mostly you will be on the winning side, this is what this analysis is all about.
Remember there's a popular saying by many Gold Trading and stock market investors that says: "The gold trend is your friend" - never go against the xauusd market.
There are four different types of Gold traders - all these use different charts to trade as described below.
Examples of how each type of XAUUSD trader uses multiple XAUUSD Trading time-frames analysis strategy:
Best Chart Timeframe to Trade XAUUSD
This group holds onto their trades for only a few minutes. The scalper never holds on to a trade for more than ten minutes. With the objective of making small amounts of pips as profit, 5 - 20 pips.
A Scalper using 1 min chart wants to go long, checks the 5 minutes trading chart, which look like the one below, since 5 minute explain gold trend is going up, then decides from this analysis it's okay to buy.
Best Chart Timeframe to Trade XAUUSD
Best Chart Timeframe to Trade Gold
This group of traders holds on to their trades for few hours but not more than a day. With the objective of making quite a number of pips, 30 to 100 pips.
Day trader trading 15 min trading chart wants to go long, checks the 1 H chart, which look like the one below, since 1 hour shows market gold trend is going up, then decides from this analysis it's okay to buy
Best Chart Timeframe to Trade Gold
Best Chart Timeframe to Trade Gold
This group of traders holds on to their trades for few days to a week. With the aim of making a big number of pips, 100 to 400 pips.
Swing trader using the 1 Hour trading chart wants to go short, checks the 4 Hour chart, which looks like the xauusd example illustrated & explained below, since 4 hour shows the gold trend is going down, then decides from this analysis it's okay to sell.
Best Chart Timeframe to Trade Gold
Best Chart Timeframe to Trade Gold
These are the traders who hold on to their trades for weeks or months. With main objective of making a big amount of pips profit, 300 to 1000 pips.
Position trader using the daily trading chart wants to go short, checks the weekly chart, weekly looks like the one below, since weekly shows the gold trend is going down, then decides from this analysis it's okay to sell.
Best Chart Timeframe to Trade Gold
How to Define A XAUUSD Trading Trend
Using a gold system has 3 indicators - Moving Average Crossover System, RSI and MACD & uses simple rules to define the trend. The rules are:
Upward trend
Both MAs Moving Up
RSI above 50
MACD Above Centerline
Downwards Gold Trading Trend
Both MAs Moving Down
RSI below 50
MACD Below Centerline
For More explanation about this system read: How to Generate Trading Signals with a Gold Trading System.
