Gold Trading Tips
Some say that gold is one of the most difficult markets to trade and there is some truth to that – gold doesn’t move like other markets and if investors want to be successful trading it (and it can be very rewarding), they have to keep several things in mind. Over the years of monitoring and analyzing the gold market we noticed many profitable rules and patterns. We successfully applied them and are still applying them for our precious metals trades and we will share our knowledge on this page. It took years of analyzing, testing and using our own capital to make sure that these points are really useful. The tips that you find below should make trading gold easier and much more profitable.
- Keep the sizes of your gold, silver and mining stock trading positions small. The higher the chance of being correct.
- Keep carefully the sizes of your gold, silver and mining trading positions small. The bigger the chance to be correct.
- Check the efficiency of each indicator that you want to use on the gold marketplace (or other marketplaces) before applying it and trading real capital based on it.
- Consider using RSI and Stochastic indicators for gold, silver and mining stocks as they have proven to be useful over many years. Other indicators can be useful as well, but be sure that you examine them before you decide to make trading decisions predicated on them.
- If a given indicator works “almost as well” as you’d like it, but you see that it has potential, don’t be afraid to modify it. For example in case of RSI, you see good selling opportunities when this indicator moves to 65 or so instead of the classic 70 level) then it could be useful and lucrative to either add additional overbought / oversold level, breaking which would generate a signal (in this case a sell signal) or to change the parameters of the indicator, deviating from the standard values.
- Use moving averages only if they have been working for a given market in the past – if confirmed market has been ignoring a certain moving average, most likely so can you.
- Keep track of the price seasonality – in our opinion its best to use True Seasonal as expiration of derivatives can also have an important impact on the price of gold, but if you can’t get access to them, it’s better to make use of regular seasonality than none at all.
- Silver and mining shares. The more significant lows or highs are used for creating a given trend line or channel, the stronger the support or resistance is.
- The previous highs and lows can and often serve as support/ resistance levels aswell – in the case of the valuable metals market, the strength of the support / resistance is strength of the support / resistance created as rising or declining trend lines. The even more significant the high or low is usually, the stronger the level of resistance or support.
- Note that markets have not only a cyclical nature, but a fractal one, too. Which means that price patterns that we saw on a bigger scale are quite likely to be seen on a smaller scale (proportionately). Silver or mining stocks and shares will move. , make sure to be on the lookout for the self-similar patterns (if the current price move is similar to the previous ones, it’s quite likely that the final part of the pattern – that’s still ahead – will also be similar, which allows you to position yourself to take advantage of it).
- Pay attention to volume. The volume is a very important, yet often overlooked, piece of information. If a rally is definitely accompanied by rising volume, then it’s likely a start of an even bigger rally. Then it’s likely ending. If a decline can be accompanied by high or increasing volume (unless there is a day when the purchase price visibly reverses), then the decline is likely to continue. If a decline is certainly accompanied by low volume, then there are no meaningful implications (yes, the situation is not symmetrical in this instance). The above are general guidelines, and before applying them to the current market situation, be certain to check if the above (the part of the above that currently represents the situation on the market) really worked in the way above – if it didn’t, after that it’s generally easier to expect the same type of reaction that previously accompanied a particular price/volume pattern.
- Look for price formations (like a head and shoulders formation), but before you apply them (believe that a certain formation is “in play” and likely to cause a specific move which would cause you to enter or close confirmed trade) be sure to check on if this kind of formation worked on this market previously. For instance “breakouts” (which are not a formation by themselves, but this example illustrates what we mean) in silver have quite often resulted in price declines (breakouts were invalidated) instead of rallies, so their actual implications were the opposite of what one might have expected based on the classic definition of a breakout.
- Wait for confirmations. It’s usually better to wait for breakouts / breakdowns confirmation before taking action. In the case of the precious metals market, predicated on our experience, it’s worth waiting for three consecutive closing prices below / above the critical price level before viewing the breakout / breakdown as “confirmed” and thus meaningful. Invalidation of a breakout is normally a bearish sign and invalidation of a breakdown is a bullish sign.
- Analyze more than the market in which you want to trade. In today’s global economy no marketplace can move totally independently. Gold and the rest of the valuable metals sector are no exception – their price moves are often linked to the moves on the currency market, progresses the general stock market, interest rates, Fed’s comments, and performance of gold stocks and silver stocks are just the most important ones. Be sure to check what markets were moving in tune or in the contrary direction to gold before and make sure that their impact is likely to be supportive of the trading position that you are about to open. For instance, then your odds are that the USD Index will top and contribute to or even trigger gold’s decline.
- Analyze ratios. Of course, but this has not been the case during the post-2011 decline), that are important due to fundamental factors (gold vs. bonds ratio – both can be seen as safe-haven assets and major bottoms and tops in this ratio take place along with main tops and bottoms in gold, so it can be used as a confirmation) or because they are frequently discussed (gold to oil ratio).
- Analyze other time-frames than the one that you’re focusing on. Even if you are placing a short-term trade, make certain to check the medium- and long-term trend. Generally, the longer the time frame, the more powerful the support and resistance levels, so even if you analyzed the short-term picture, it can be the case that a given move will become stopped by a medium- or long-term level of resistance. If you’re concentrating on the moderate- or long-term trades, the short-term picture can help you fine-tune the moment of entering or exiting the marketplace.
- Be on the constant lookout for anomalies. When you see something odd, investigate and find the reason behind it and check if anything similar happened previously – if yes, examine what happened next. If similar things were always followed by the same kind of price pattern in gold, silver and/or mining shares, it might be a good idea to trade it. If not really, then perhaps the reason behind the anomaly resulted in something else that had a more specific effect on the precious metals prices.
- Monitor investor sentiment. If the vast majority (!) of valuable metals investors and traders are bullish, then gold is likely close to a top (in cases like this it makes sense to look for selling signals and / or confirmations that the top is in and – if they are present – exit long positions and enter short ones). Conversely, if everyone and their brother is usually bearish in the marketplace, then a bottom is very likely close to being in or already in. The ways to estimate sentiment include checking how often people look for gold-related terms (like “gold stocks”) in Google Trends, monitoring outcomes of surveys with questions like “where will gold price be in 3 months” and similar queries, on a side note when you see a certain, big gold-related website is very slow or crashes after a big move up or down, after that it likely implies that the traffic / interest in gold was enormous, which is another way of detecting that a major price extreme is well-nigh (we saw that in 2011 when gold topped).
- Even if your primary approach is definitely to trade gold, we still encourage you to consider dedicating a part of the capital to long-term investments – it should lower the overall variability of your returns and making gains more stable. There are also other benefits that people outlined in our very first report in which we discussed whether trading gold or investing in it is more profitable. Our precious metal portfolio report includes a sample portfolio for “Trader John”, which might serve as an example (of course, it’s not investment advice) of how traders could structure their portfolios and benefit from diversified strategies.
- Before you decide to follow a given analyst, be sure to check how long they have been in the business and if they’re known for their good performance.
- If you do decide to follow someone, it’s usually smart to stay with them even if they happen to be incorrect about the market one or even a few times in a row as markets are sometimes moving almost randomly (they are emotional, not logical in the short term) and everyone has to be incorrect eventually (that doesn’t necessarily imply following what they do using your capital – it means monitoring their overall performance to observe for yourself if they can grow your capital over time).
The above is not a 100% complete list of what we discovered on the topic of gold trading, but it includes the majority of things that we found to be very useful over and over again.
Best Cryptocurrency Brokers
Lucrum Pro Review
Onorio Review
EasyMarkets Review
Markets.com Review
AvaTrade Review
Plutus Global Review
Profit Trade Review
Galore Pro Review
UFX Review
-
VIN’S PEOPLE: Gold Feather Grads do Southeast proud - Sarasota Herald-Tribune
on Feb 28, 2021 at 12:04 pm
VIN’S PEOPLE: Gold Feather Grads do Southeast proud Sarasota Herald-Tribune
-
Irish company launches service which turns bitcoin into gold bars - Belfast Telegraph
on Feb 28, 2021 at 11:00 am
Irish company launches service which turns bitcoin into gold bars Belfast Telegraph
-
Gold for Rakesh, mixed doubles pair in Fazza world ranking tournament - Hindustan Times
on Feb 28, 2021 at 10:58 am
Gold for Rakesh, mixed doubles pair in Fazza world ranking tournament Hindustan Times
-
After the worst start in 30 years, gold losses sheen this February - Hindustan Times
on Feb 28, 2021 at 10:52 am
After the worst start in 30 years, gold losses sheen this February Hindustan Times
-
Rein Gold by Elfriede Jelinek review – a wearying Wagner update - The Guardian
on Feb 28, 2021 at 9:00 am
Rein Gold by Elfriede Jelinek review – a wearying Wagner update The Guardian
-
Gold is So Rip-Snortin' Cheap! - FX Empire
on Feb 28, 2021 at 8:45 am
Gold is So Rip-Snortin' Cheap! FX Empire
-
Dying for Gold: Rich Industry Relies on Freelance Miners - Global Press Journal
on Feb 28, 2021 at 8:15 am
Dying for Gold: Rich Industry Relies on Freelance Miners Global Press Journal
-
Price of Gold Fundamental Daily Forecast - Gold Bulls Losing Battle with Bond Investors - FX Empire
on Feb 28, 2021 at 8:04 am
Price of Gold Fundamental Daily Forecast - Gold Bulls Losing Battle with Bond Investors FX Empire
-
Willamette Meteorite restored after vandals paint it gold - Pamplin Media Group
on Feb 28, 2021 at 8:00 am
Willamette Meteorite restored after vandals paint it gold Pamplin Media Group
-
Lundin Gold Inc. (FTMNF) CEO Ronald Hochstein on Q4 2020 Results - Earnings Call Transcript - Seeking Alpha
on Feb 28, 2021 at 7:12 am
Lundin Gold Inc. (FTMNF) CEO Ronald Hochstein on Q4 2020 Results - Earnings Call Transcript Seeking Alpha
-
SBI cites 6 big reasons to invest in Sovereign Gold Bonds - Mint
on Feb 28, 2021 at 6:58 am
SBI cites 6 big reasons to invest in Sovereign Gold Bonds Mint
-
Denver secures Gold Pan for second-straight season - The Denver Post
on Feb 28, 2021 at 5:01 am
Denver secures Gold Pan for second-straight season The Denver Post
-
Bravely Default 2 - Gold in the Grass Side Quest Guide - Attack of the Fanboy
on Feb 28, 2021 at 4:43 am
Bravely Default 2 - Gold in the Grass Side Quest Guide Attack of the Fanboy
-
Daily Gold And Blue Nation Report 2.27.21 Night - WBOY.com
on Feb 28, 2021 at 4:23 am
Daily Gold And Blue Nation Report 2.27.21 Night WBOY.com
-
Gold rate today slashes in Hyderabad, Bangalore, Kerala, Visakhapatnam on 28 February 2021 - The Hans India
on Feb 28, 2021 at 3:12 am
Gold rate today slashes in Hyderabad, Bangalore, Kerala, Visakhapatnam on 28 February 2021 The Hans India
-
Falling prices drive demand for gold but officials say no to increasing import quota - The Kathmandu Post
on Feb 28, 2021 at 2:53 am
Falling prices drive demand for gold but officials say no to increasing import quota The Kathmandu Post
-
Conservatives have made a gold-colored Trump statue - Yahoo News
on Feb 28, 2021 at 2:53 am
Conservatives have made a gold-colored Trump statue Yahoo News
-
Lambrechts Claims Big Ten Shot Put Gold - University of Nebraska - huskers.com
on Feb 28, 2021 at 2:26 am
Lambrechts Claims Big Ten Shot Put Gold - University of Nebraska huskers.com
-
Joyce Kimeli, Dante Brown claim gold at SECs - Auburn Tigers Official Athletic Site
on Feb 28, 2021 at 1:53 am
Joyce Kimeli, Dante Brown claim gold at SECs Auburn Tigers Official Athletic Site
-
Gold-colored Trump statue at CPAC drawing crowds - Q13 FOX (Seattle)
on Feb 28, 2021 at 1:48 am
Gold-colored Trump statue at CPAC drawing crowds Q13 FOX (Seattle)
-
Judoka Kamini wins gold - The Tribune India
on Feb 28, 2021 at 1:34 am
Judoka Kamini wins gold The Tribune India
-
Green and Gold: Sean Smith goes '100 percent,' wins Carlisle first District 3 gold since 2011 - The Sentinel
on Feb 28, 2021 at 1:27 am
Green and Gold: Sean Smith goes '100 percent,' wins Carlisle first District 3 gold since 2011 The Sentinel
-
Aust mines produce $27bn record gold haul - 7NEWS.com.au
on Feb 28, 2021 at 1:02 am
Aust mines produce $27bn record gold haul 7NEWS.com.au
-
Aust mines produce $27bn record gold haul - 7NEWS.com.au
on Feb 28, 2021 at 1:02 am
Aust mines produce $27bn record gold haul 7NEWS.com.au
-
Corning’s Lindsey Butler wins gold and sets new ACC Championship record - WETM - MyTwinTiers.com
on Feb 28, 2021 at 12:52 am
Corning’s Lindsey Butler wins gold and sets new ACC Championship record WETM - MyTwinTiers.com
-
Royal Prince outruns Dyn O Mite in Black Gold Stakes - Daily Racing Form
on Feb 28, 2021 at 12:15 am
Royal Prince outruns Dyn O Mite in Black Gold Stakes Daily Racing Form
-
Another N.J. business lost to COVID. Gold’s Gym location closing permanently. - NJ.com
on Feb 28, 2021 at 12:09 am
Another N.J. business lost to COVID. Gold’s Gym location closing permanently. NJ.com
-
3/1/2021 - 3/5/2021 : BMO Metals and Mining Conference
on Feb 27, 2021 at 11:03 pm
-
Sabina Gold & Silver: Back River Feasibility Study Confirms Robust Economics - Seeking Alpha
on Feb 27, 2021 at 10:01 pm
Sabina Gold & Silver: Back River Feasibility Study Confirms Robust Economics Seeking Alpha
-
Olympic gold medalist Connor Fields impressed with Circle City BMX track - Dothan Eagle
on Feb 27, 2021 at 9:50 pm
Olympic gold medalist Connor Fields impressed with Circle City BMX track Dothan Eagle
-
Russian shooters earn another gold at Cairo World Cup in mixed team event - Insidethegames.biz
on Feb 27, 2021 at 9:02 pm
Russian shooters earn another gold at Cairo World Cup in mixed team event Insidethegames.biz
-
Gold Price Forecast: XAU Tanks Hard as Yields, Inflation Fears Climb - DailyFX
on Feb 27, 2021 at 8:00 pm
Gold Price Forecast: XAU Tanks Hard as Yields, Inflation Fears Climb DailyFX
-
Joey Gallo is Digging for More Gold in Right Field in 2021 for the Rangers - Dallas Sports Fanatic
on Feb 27, 2021 at 7:25 pm
Joey Gallo is Digging for More Gold in Right Field in 2021 for the Rangers Dallas Sports Fanatic
-
Food Recall Warning (Allergen) - Co-op Gold Pure brand Almond Butter - Crunchy Roasted recalled due to undeclared cashew - Canada NewsWire
on Feb 27, 2021 at 6:49 pm
Food Recall Warning (Allergen) - Co-op Gold Pure brand Almond Butter - Crunchy Roasted recalled due to undeclared cashew Canada NewsWire
-
Another gold for local heroine Kudre at World Ski Orienteering Championships - Insidethegames.biz
on Feb 27, 2021 at 5:59 pm
Another gold for local heroine Kudre at World Ski Orienteering Championships Insidethegames.biz
-
Gold: Searching for goals and wins in south Florida - WRALSportsFan.com
on Feb 27, 2021 at 5:07 pm
Gold: Searching for goals and wins in south Florida WRALSportsFan.com
-
Rowdy Rebel Reacts To His Single “Computers” Going Gold + Gives Thanks To Bobby Shmurda - Hot97 - Hip Hop & R&B News
on Feb 27, 2021 at 4:28 pm
Rowdy Rebel Reacts To His Single “Computers” Going Gold + Gives Thanks To Bobby Shmurda Hot97 - Hip Hop & R&B News
-
March 11 date for Proof American Eagle gold launch - Coin World
on Feb 27, 2021 at 3:29 pm
March 11 date for Proof American Eagle gold launch Coin World
-
Is gold set to fall further? - BusinessLine
on Feb 27, 2021 at 3:11 pm
Is gold set to fall further? BusinessLine
-
‘Insane’: Proposed gold mine to take coal wastewater, dam headwaters - Sydney Morning Herald
on Feb 27, 2021 at 1:00 pm
‘Insane’: Proposed gold mine to take coal wastewater, dam headwaters Sydney Morning Herald
-
‘Insane’: Proposed gold mine to take coal wastewater, dam headwaters - Sydney Morning Herald
on Feb 27, 2021 at 1:00 pm
‘Insane’: Proposed gold mine to take coal wastewater, dam headwaters Sydney Morning Herald
-
Hutti Gold Mine workers protest by holding up torn boots during Minister’s visit - The News Minute
on Feb 27, 2021 at 12:40 pm
Hutti Gold Mine workers protest by holding up torn boots during Minister’s visit The News Minute
-
Anaconda doubles gold estimate at proposed mine near Goldboro - CBC.ca
on Feb 27, 2021 at 10:00 am
Anaconda doubles gold estimate at proposed mine near Goldboro CBC.ca
-
Poll: Are you happy with March's Games with Gold lineup? - TrueAchievements
on Feb 27, 2021 at 9:57 am
Poll: Are you happy with March's Games with Gold lineup? TrueAchievements
-
Mother Lode Mine produced large amounts of mercury - Pamplin Media Group
on Feb 27, 2021 at 8:00 am
Mother Lode Mine produced large amounts of mercury Pamplin Media Group
-
Gold Bond Scheme 2020-21 to be issued at Rs 4,662 per gram from March 1-5 - Business Standard
on Feb 27, 2021 at 6:54 am
Gold Bond Scheme 2020-21 to be issued at Rs 4,662 per gram from March 1-5 Business Standard
-
Investing in digital gold? Keep these important things in mind - The Financial Express
on Feb 27, 2021 at 3:28 am
Investing in digital gold? Keep these important things in mind The Financial Express
-
Out of Stock! Are We Facing a Coming Silver Shortage?
by [email protected] (Financial Sense) (Financial Sense) on Feb 27, 2021 at 2:29 am
With James J. Puplava, CFP®, CTS™, CIS, CES, CFS, AIF® and Cris Sheridan Feb 26 – Physical demand for silver coins and bars has seen a steady increase in 2021 with premiums remaining elevated, in some cases the highest ever. David Morgan and Ronan Manly discuss what is happening in the silver market...
-
Kirkland Lake Gold Ltd. (KL) Q4 2020 Earnings Call Transcript - Motley Fool
on Feb 27, 2021 at 12:31 am
Kirkland Lake Gold Ltd. (KL) Q4 2020 Earnings Call Transcript Motley Fool
-
Kirkland Lake Gold Ltd. (KL) Q4 2020 Earnings Call Transcript - Motley Fool
on Feb 27, 2021 at 12:31 am
Kirkland Lake Gold Ltd. (KL) Q4 2020 Earnings Call Transcript Motley Fool
-
Coeur Mining, Inc. Announces Expiration of Tender Offer for its Outstanding 5.875% Senior Notes Due 2024 - Business Wire
on Feb 27, 2021 at 12:02 am
Coeur Mining, Inc. Announces Expiration of Tender Offer for its Outstanding 5.875% Senior Notes Due 2024 Business Wire
-
Mayor Soriano Signs Sustainable Jersey Gold Pledge in Energy - TAPinto.net
on Feb 26, 2021 at 11:33 pm
Mayor Soriano Signs Sustainable Jersey Gold Pledge in Energy TAPinto.net
-
A year of progress as Amarillo meets key milestones for Posse Gold Project in 2020 - GlobeNewswire
on Feb 26, 2021 at 11:08 pm
A year of progress as Amarillo meets key milestones for Posse Gold Project in 2020 GlobeNewswire
-
A year of progress as Amarillo meets key milestones for Posse Gold Project in 2020 - GlobeNewswire
on Feb 26, 2021 at 11:08 pm
A year of progress as Amarillo meets key milestones for Posse Gold Project in 2020 GlobeNewswire
-
Tanzanian Gold Reports Annual Meeting Voting Results Toronto Stock Exchange:TNX - GlobeNewswire
on Feb 26, 2021 at 11:00 pm
Tanzanian Gold Reports Annual Meeting Voting Results Toronto Stock Exchange:TNX GlobeNewswire
-
The Big Picture - where could gold head from here? - Kitco NEWS
on Feb 26, 2021 at 10:48 pm
The Big Picture - where could gold head from here? Kitco NEWS
-
There's Gold In Those Bottles - Agweb Powered by Farm Journal
on Feb 26, 2021 at 10:09 pm
There's Gold In Those Bottles Agweb Powered by Farm Journal
-
More gold bears waking from hibernation | Kitco News - Kitco NEWS
on Feb 26, 2021 at 9:21 pm
More gold bears waking from hibernation | Kitco News Kitco NEWS
-
Closing prices for crude oil, gold and other commodities - Rome News-Tribune
on Feb 26, 2021 at 9:13 pm
Closing prices for crude oil, gold and other commodities Rome News-Tribune
-
Gold Rout Deepens With Metal Set for Worst Month in Four Years - Yahoo Finance
on Feb 26, 2021 at 9:12 pm
Gold Rout Deepens With Metal Set for Worst Month in Four Years Yahoo Finance