Types of XAU USD Traders

There are various types of xauusd traders and each type is determined by the amount of time that they hold their open trades & the lot sizes that they trade.

The most frequent trading types are:

Scalpers
Day Traders
Swing Traders
Position Traders

Scalpers

This is one of the more popular methods of trading gold, traders will open and hold their trade positions transactions for a period of a couple of minutes only & profit from only a few pip(point) movement. Traders will use the one minute charts to figure out the current market trend and open transactions using this one minute chart. Scalpers will aim to make a profit of between 200 & 300 points per trade position. 100 points is equivalent to $1 dollar change in the gold price, therefore this profit target is a $2 to $3 dollars change in price.

Day Traders

These traders will open & close-out trade positions during same trading day & won't hold overnight trade transactions. Day traders will use the 5 minutes or 15 minute charts to figure out the market trend direction & open trades using these trading charts. The day traders will hold their trade transactions open for a few hours and try to make profits from the intraday market trends.

Day traders will aim to make a profit of between 700 & 900 points per transaction. 100 points is equal to $1 dollar change in the xauusd price, henceforth this profit target is a $7 to $9 dollars change in price.

Swing traders

These traders open trades and hold them for a few days so as to earn profits from the intraweek trend that lasts for 2 or 3 days. These traders will sometimes leave their open trades overnight so that to catch more trading profits from the intraweek trend.

These traders will use the 1 hour fx charts to figure out the market trend of the market & place transactions using this time=frame.

Swing traders will aim to make a profit of between 2000 and 5000 points per trade position. 100 points is equal to $1 dollar change in the xauusd price, therefore this profit target is a $20 to $50 dollars change in price.

Position Traders

These traders will hold their trades open for a few weeks to a few months and they will place trades that aim to make profits from the medium-term & long-term trend of the gold prices.

Position traders will use the Daily & Weekly charts to figure out the price trend and place trades using these daily and weekly charts. Position traders will trade with the goal to earn a profit of between 20000 and 40000 points per trade position. 100 points is equal to $1 dollar change in the xauusd price, henceforth this profit target is a $200 to $400 dollars change in price.

About Day Trading Method

The most popular method of trading xauusd is the intraday trading method, most traders prefer to day trade gold & open and close-out their trades within the trading day. These traders will keep their trade transactions open only for a few hours. This way a trader will aim to make profits of between 700 & 900 points which's the average daily movement of gold prices. At the same time a gold trader can close their trades quickly in case the price trend moves against their market direction.

100 point movement is equivalent to a one dollar change in the price of xauusd per ounce. For example if gold moves from $1250 to $1251, this will represent a 100 point move in gold prices.

Day Trade Example

The example laid-out below shows 15 minute chart that's used for day trading. The day trader will use this 15 minutes trading chart to open trades. The trend below is upward thence a gold trader would have opened a buy trade transaction. If the trader bought 1 gold lot at the price of $1210 per ounce & closed the trade at $1242 dollars per ounce, this would be a $32 change in the price per gold ounce which is equal to a 3200 points change; this is because the gold price is quoted using 2 decimal points.

Scalpers, Day Traders and Swing Traders

The profit of xauusd for every point is $1, henceforth for this trade is $3,200 dollars from this trade transaction.

Day traders will only trade using the 15 minutes chart and hold their open trade positions as long as the trend is moving in their trade direction. Once the market trend on the 15 minutes chart changes, then traders will close all their open trade transactions and wait out for another trade setup before opening another trade.

In the example above a trader would close their buy trade at $1242 because this is where the direction of the market changed like as displayed and illustrated by the two moving averages that have reversed their direction and both have started to move downward.

The above trend is determined on the 15 minutes xauusd gold trading chart. This trade was opened & only lasted for ten hours & a gold trader would have closed the trade after this time & wait out for another trade setup the following day.

Study More Lessons & Topics:

Trade Forex Trading