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  • Writer's pictureVasily Trader

5 Must-Know Tips for Trading Gold. XAUUSD Secrets After 9 Years of Trading


gold trading secrets

After more than 9 years of Gold trading, I decided to reveal 5 essential trading tips, that will save you a lot of money, time and effort.


Of course, these trading recommendations won't make you rich, but they will certainly help you to avoid a lot of losing trades.


Whether you are new to Gold trading or an experienced trader, these insights will dramatically improve your trading.



Don't trade gold with a small account


I always repeat to my students that in gold trading, the risk per trade should not exceed 1% of a trading account.


It means that if your trades close with stop loss, you should lose maximum 1% of your deposit.


For the majority of the day trading and swing strategies, you will require at least 2000$ deposit to risk 1% per trade. Trading with a smaller account size, it will be challenging to follow this risk management principle of not exceeding 1% 


xauusd trading secrets

Here is a day trade on Gold.

With a stop loss of 619 pips and a trading account of 10000$,

a lot size for this trade will be 0.02.

If the trade closes on stop loss, total risk will be 100$ or 1% of a trading account. 


With a 100$ account, trading with a minimal lot 0.01, your potential risk will be 50$ or half of your trading account.



Check spreads


Spread may dramatically fluctuate on Gold.


High spreads can make it difficult for day traders to catch small price movements, reducing the profit potential of their trades.


Wide spreads can lead to slippage, where day traders may end up buying at a higher price and selling at a lower price than expected, increasing the risk of losses.


Gold has the lowest spreads during London and New York sessions,

while trading the Asian session is not recommended.


Personally, I don't trade Gold if the spread exceeds 100 pips.


gold trading tips

In the picture above, you can see a current spread on Gold. It is 30 pips. It is a relatively low spread, so we can trade.



Don't trade on US holidays


When US banks are closed, liquidity drops substantially on Gold.

It leads to increased spreads and higher probabilities of manipulations,

reduced volatility and very slow market.


For that reason, it is better not to trade Gold during US holidays.


gold trading and banking holidays

You can easily find the calendar of US banking holidays on Google.


Simply take a break during these trading days.



Don't trade ahead of important US news


US news may dramatically affect Gold prices.

Such events as FOMC or FED Interest rate decision may trigger a high volatility and very impulsive movements.


My recommendations to you is to stay away from trading Gold one hour ahead of the important news releases.


You can find important US news in the economic calendar.

Just sort out the calendar in a way that it would display only significant news and pay attention to them.


gold trading and fundamental news

Above, you can see the important US news for the coming days in the economic calendar.



Do not open multiple orders


Here is what many Gold traders do wrong:

once they place an order, instead of patiently waiting for a stop loss or take profit being reached, they start opening more orders.


Please, open one single trade per your prediction.

Open a new trade if only you see a new trading setup or your initial trade is already risk-free with a stop loss move to entry level.


Here is the example, a newbie trader decides to buy Gold and opens a long positions.


gold trading strategy

The market moves in the projected direction, and a trader opens one more trade.


how to trade gold

The one can open even dozens of positions like that.


However, the problem is that the market can always suddenly reverse and all these trades will be closed in a loss.


It can lead to a substantial account drawdown.

Open a one single trading position instead.


I truly believe that these trading tips will help you improve your gold trading. Carefully embed these rules in your trading plan and watch how your trading performance improves.

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