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  • Writer's pictureVasily Trader

How to Analyze Daily Time Frame on Gold. 5 Important Things

daily time frame analysis gold

There are 5 important things that you should analyze on Gold on a daily time frame to accurately predict long term, midterm and short term movements.

In this article, I will share with you a step-by-step guide for daily time frame analysis that you can apply on Gold or any other financial instrument.

1 - Identify the market trend

When you analyze a daily time frame, you should identify long term, midterm and short term market trends.

Long-term trend is based on the analysis of one year long price action.

how to analyze daily time frame gold

In the example above, Gold is trading in a long term bullish trend because the price keeps setting new higher high and new higher lows during the year.

Midterm trend is based on the analysis of a price action for the last 4–5 months.

gold price action daily time frame

Above, we can clearly see that a mid-term trend is bullish because again, the price sets new higher highs and higher lows over time.

Short-term trend is based on the analysis of price movements for the last 2 months.

short term analysis gold

Short-term price action is also bullish on Gold, with a clear sequence of higher highs and higher lows.

According to the trend analysis, long-term, mid-term and short-term trends are bullish.

2 - Identify the directional bias

The directional bias defines a highly probable future direction on the market.

direction bias and market trend gold

In our example, we can anticipate that Gold will keep growing among all the dimensions: long-term, mid-term and short-term.

3 - Execute structure analysis

Identify important historic horizontal and vertical structures.

That will be the points from where you should look for trading opportunities.

key levels analysis daily time frame gold

When you analyze key levels, identify the structures that are lying close to the current price levels. 

Make sure that all the structures that you spotted were respected by the market in the past.

4 - Look for price action patterns

Price action patterns are the language of the market.

Proper identification of the patters will help you correctly understand the intentions of the market participants.

price action analysis daily time frame gold

You can see that a bearish breakout of a rising channel triggered a correctional movement on the market.

Gold started to fall steadily within a bullish flag pattern and after it tested a key support, the price violated the resistance of the flag.

5 - Analyze candlesticks

Candlestick patterns can provide extra clues and confirmations.

candlestick analysis daily time frame gold

You can see that the market formed multiple rejections from key support, an inside bar formation and bullish engulfing candle.

Violation of the inside bar to the upside with a strong bullish candle is an important bullish signal.

Combining trend analysis, structure analysis, price action and candlestick analysis, and you can make predictions and look for trading opportunities.

You can also make your analysis even more sophisticated, for example, analyzing fundamental analysis or applying technical indicators.


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