Chapter 1
How I swing trade gold: using key levels trend and market structure
Greetings and blessings to all the traders out there searching for how is gold traded or struggling to dig deeper in swing trading with technical analysis. After going through all the chapters and plenty of practice on demo account you will find this course in forex trading and gold trading very helpful. Well, this is my Swing Trade Gold Strategy: using key levels , trend and market structure. I am not claiming to be the inventor of this approach, but this is the result of learnings from 7 years of my trading journey.
My main focus is always on price action for forex trading in gold while following the trend. In this xauusd trading strategy, I make use of multi-timeframes from daily to 15 minutes to ensure I am trading the trend direction. Swing trading for beginners can be very frustrating who enters the forex trading market after watching fake gurus on youtube with lormbargini and sports cars promising quick pent houses living lifestyles in Dubai? Believe me, it’s very hard and depends on how you practice.
In this article, I will explain step by step how I am doing technical analysis and taking trades in the direction of the trend so that the odds are in your favour mostly. As No strategy ensures a hundred percent win rate, so is this, it will hit stop losses too, but if you follow all the rules, 95% of the setups and early entries will be filtered out by default. Also, with practice and with good risk management, you will witness more wins than what you will lose. As someone rightly said trend is your friend, I used this as a rule very religiously in my price action trading strategy.
With this strategy, you will not need to go through the pain of learning different chart patterns and candlestick patterns. So let’s start with discussing everything step by step.Forex trading is also same as Trading gold same strategies and rules aplies to both.
I have divided the full article so that if a beginner reads it he will be knowing what exactly pros are doing but again trading is 80 percent psychology(I will explain some other day) and 20 percent technical analysis.
What is Gold / XAUUSD
Gold is a commodity tagged against some currency. What we trade thinking we are trading gold is its futures contract. Future contracts can vary from country to country for example in India brokers provide Xauinr for their clients to trade while same for a US client dealer/broker will provide XAUUSD to trade.
Broker provides its clients the ask and bid rates for the current spot price of one ounce of gold against the currency in real-time for the exchange where the broker is registered. Besides you can see the different dealers/brokers available on tradingveiw offering real-time spot prices.
Factors Which Move Gold Spot Prices.
Various factors move gold spot price up or down, why its important to keep them in mind because gold is a very volatile instrument that gives good price movements which are good for price action traders but when you are on the wrong side of the market you will end you losings money by price hitting your stop loss.
Those factors include us dollar strength, Investor Sentiment and Market Speculation, Central Bank Policies, Geopolitical and Geo-economic Events, Global Economic Conditions, and Supply and Demand.
It’s very easy to follow economic events you can simply follow the high-impact economic events by putting alerts on such events on various platforms as shown below in a screenshot. If you are a beginner it’s better to wait during such an event and trade the retracements after high-impact impact economic news.
You can have Forexfactory or my fx book app on your mobile to follow and be attentive to such reoccurring news events. Believe me, it will save a lot of your money. Knowledge is wealth. Avoid trading while news.
What are charting platforms?
For keeping the article short and to the point I am sharing with you the link to the tradingveiw where you can learn more about the charting platform I am using. But there are also various other platforms for forex trading. A deep introduction of the tradingveiw which I generally use for my chart analysis can be seen here “https://trendbuzz.co.in/comprehensive-guide-how-to-use-tradingview-charts-features-navigation-tools/“
https://www.tradingview.com/gopro/?share_your_love=PIPSBYFIBS
The help center is a good way to start and read relevant material regarding this charting platform for those beginning forex trading. I am going to use this same platform to explain my price action trading strategy.
Chapter 2
What Is the Market Structure?
From here Onwards I want you all to be very involved and take 40 to 50 screenshots of everything I am explaining. Read stop open the charts take similar screenshots and come back and continue.
Market structure is the first thing to start, if you sat down to analyze any chart be it any instrument and if you are not clear on structure leave that instrument alone for a few days. Again I am repeating, for day forex or xauusd trading or even for intraday trading if you are not getting clarity on what the market structure of the current instrument opened on the chart in tradingveiw is telling or any other charting platform leave that instrument. In Xauusd or forex trading for beginners, it is best to wait for clear price action.
We precisely can see only 3 kinds of market structure Bullish, bearish, and ranging. There is no 4th state of the market. Either it will be bullish, bearish, or in range. Going Further from here article brings clarity in answering what is a bull market cycle, is the bull market starting, bull and bear market phases, what is bear market in forex, what is a bear market cycle, what is a bear market simple definition, what is considered bear market territory, what happens when bear market end, are we in a bull or bear gold market same , What is going to happen to gold in 2023? answer for the doubts one has about the market, lies in market structure , following higher highs or lower highs and when and where the market structure is broken, and seeing supporting swing pivot points forming and thus confirming the structure and price intentions. We will see either higher highs or lower highs ,follow same strategy for forex trading. If we are not seeing price making them, then its a range, and their happens to be indecision in the market. In detail explaination is coming in the following content.
Bullish market structure.
In a bullish market structure you will see price making Up moves means going up for e.g below you can see in the gold live chart price on a daily time frame going up.
Another thing that can help you identify market structure is using swing pivot points with high and low indicators.
Make it look like a better low once you have that indicator on your chart refer below
Now it is very easy to decide which state market is currently into. We can see it make consecutive higher highs and higher lows. Better you start to mark them manually .all blue labels swing pivots are higher lows and all red color swing pivot points are higher highs. I will give you a visual illustration of this below. But you have to be very clear on this stage market is bullish, why. Because it’s making higher highs and higher lows
Bearish market structure
In a bearish market structure, prices will be going down and while doing so it will make lower lows and lower highs. This is because of an increase in supply and hence demand or buyer gets overrun by sellers thus faces aggressive supplies Another explanation is when prices go up over a while this phenomenon makes the stakeholder of the gold contracts interested in profit booking at the higher price, which leads to an increase in the supply of gold in the market and thus the price falls. Refer visual illustrations below for further clarity:
Price at daily as in the above picture stopped going further up and started moving down, there is a transition like the movement.
- what have you noticed?
- Well that’s the main game in trend trading
- If you catch that or learn that then half of your analysis and psychology game is over.
- Understanding price behavior when it’s overextended after reaching the top and before reversing.
- Price no longer making any new higher high.
- Price didn’t respect the higher low, instead it broke it.
- Price made a lower high.
- Price made another lower low ( breaking the previous lower low).
Refer below for visual clarity
Hope this section will not only give you all clarity on what is bearish market structure but also what is price transition is market structure breaks from bullish to bearish. The importance of this piece of knowledge will help in being a good trader.
Ranging Market Structure
This is the easiest of all forms of price structure but is still responsible for most losses. It’s here where most traders blow their accounts. If you are new, better to look at some other instrument until the structure shows clear bearish or bullish nature of price.
- We sell in a bearish market structure and buy in a bullish market structure irrespective of time frames.
- And if the price is in range stay away from 90 percent of the problems anyone can see or experience in this state of the market.
- All said a ranging market is when the price fails to break the previous high and also fails to break the previous low
- Price will come up and down both and thus takes out entries of both seller and buyers of gold.
Hence if someone is asking how to invest in gold online, the answer is to trade gold online by seeing the price market structure.
Refer below for visual clarity
Rules
- 1. Buy In a bullish market
- 2. sell in a bearish market
- 3. Look at some other instrument if the market is in range.
This brings us to an end of understanding 3 major states of market structure. Now we know
- What is market structure trading
- What is the market structure break
- How to analyze market structure
- what is a market structure
Benefits of this section of understanding
- Successful trader.
- Timing entries
- Avoid being on the wrong side of the market
- Trend trading
- Avoid stop-loss hunts
- Cathing Momentum Trades