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  • Writer's pictureVasily Trader

Best Trend Following Strategies for Gold. XAUUSD Day Trading

Updated: Apr 14


best trend following strategies for gold trading

The recent bull run on Gold is a perfect example of a strong trending market. For traders, such sentiment always provides very profitable trading opportunities.


In this article, I will share with you 3 best trend-following strategies for day trading Gold that showed extremely high performance this year.



So what I did, I back tested 4H/1H time frames since the middle of February when the bull market started.


best gold day trading strategy

I tested various strategies: price action, SMC, multiple indicators, candlestick patterns; and I was looking for the ones that showed the highest accuracy and profitability.


1. Moving Averages Crossover


The first strategy that showed a very high performance was based on a crossover of 2 moving averages.


Exponential MA with 30 length.

Simple MA with 9 length.


For entry signal, Simple MA should cross Exponential MA from the downside and a candle should close above both MAs'.


Stop loss will be below the closest horizontal support.


xauusd trading strategy with moving average

The setup is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss.


xauusd moving average trading strategy

13 setups we spotted.

9 of them were profitable.


Total winning rate is 69%.


2. Trend-Following Patterns


The second strategy that showed a very high performance was based on classic price action patterns.


I was looking for bullish patterns like bullish flag, falling wedge, horizontal range, double bottom, head and shoulders, ascending triangle, cup & handle.

Bullish confirmation was a breakout and a candle close above a neckline of the pattern.


The pattern is considered to be losing if, after the breakout of the neckline, the price dropped below its lows.

The pattern is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss.


price action strategy for gold trading

From 14th of February to 8th of April, I found 37 bullish patterns.


how to trade gold with price action patterns

According to the rules that I described above, 31 pattern turned out to be profitable.


That gives 83% winning rate.


3. Break of Structure (BoS)


The Break of Structure strategy is very old and based on breakouts of current highs.

In a bullish trend, after the price violates the levels of a current Higher High HH, a bullish continuation is expected.


A long trade is opened after the candle closes above HH or on a retest.


smart money concepts trading strategy for xauusd

With such a strategy, Stop Loss is lying below the last Higher Low HL.

The setup is considered to be profitable if, after the entry, the price moved up at least by pips distance from entry to stop loss


For the same period, I identified 21 Breaks of Structure.


xauusd profitable smc trend following strategy

According to the rules, 18 setups were profitable.


Total win rate is 85%.


Remember that you should not overestimate the performance of these strategies. They work perfectly only in times of a strong bullish market. Such periods are extremely rare.


However, once you see a strong bullish season, these strategies will help you to get maximum from it.


Good luck in trading!

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