Trade Forex Trading

Types of XAU/USD Analysis

There are two types of analysis when trading gold. These 2 types of market analysis:

  1. Technical Analysis
  2. Fundamental Analysis

Technical Analysis

Technical analysis is the use of charts and indicators to determine the direction of the gold prices & which trade to open at a particular given time.

Technical analysis will involve the study of chart prices--movementprice--movements, indicators and various line studies that are used for this analysis.The study of chart prices include study of chart patterns that form repeatedly and these patterns are studied by technical traders so that when they appear again on the Gold trading charts traders can then know how to interpret these patterns and know which trades to place in the gold market.

There is also the study of candle patterns - the candles trading method was developed by traditional Japanese traders & this study is popularly used when trading the xauusd trading market. Technical traders will also learn about candles patterns and learn how to interpret these candle patterns so that as they can use these studies when trading gold online.

The other trading analysis concept used to trade gold is the use of line studies. Line studies are lines placed charts & used differently to generate signals.

Support and Resistance lines - these are used to highlight support & resistance zones which are potential levels where the price might stop or even reverse direction. These levels are used by traders to know where to place trades or determine where to set take profit levels & also stop loss levels. Lines will be used to mark these technical levels.

Trend lines - because gold prices move in over-all directions for quite some time in what is referred to as trends, traders will use trend-lines to identify the trend direction of the gold market and to determine the best place where to open and close a trade based on these trend-lines. Upward trend-lines show the over-all general market direction is upward while downwards trend lines show that the general market direction is downward.

Technical indicators - the main trading tools used by trading analysis traders are technical indicators. Indicators are tools that are used to calculate the direction of the market trend & the force of the price trends.

The various indicators that are used by technical analysts to trade the online gold market & the most popular/liked indicators are

  1. Moving Averages
  2. RSI
  3. MACD
  4. Bollinger Band

Beginner traders need to learn about these indicators so that they can know how to use the to generate signals.

Technical analysis is a wide topic & traders will continue to learn more about trading analysis as they continue reading this gold trading tutorial. Various topics will be covered on their own in the trading analysis concepts section of this website.

Fundamental Analysis

Fundamental analysis is the use of fundamental reports otherwise known as economic reports that are coming from the USA to identify whether to buy or sell xauusd which is traded against the USA Dollar.

Fundamental reports will be traded in the format where if the news announcements coming from the USA are good for the USA, then traders will sell gold & hold their value in USA Dollars. If on the other hand the news reports coming from the USA are bad for the USA, then traders will buy gold which is likely to appreciate against the USA Dollar due to and because of the bad news announcements coming from the USA.

In fundamental analysis traders will use economic data reports such as:

  1. GDP
  2. Trade Balance
  3. Employment Reports
  4. Inflation Reports
  5. Interest Rates

These reports will be used to identify whether to buy or sell xauusd based on their outcome.

Traders using this method to analyze price movements will need to keep up with the economic reports coming from the USA so that they know which side of the trade to take when trading the online gold market.

Selecting a Method

Traders can decide which of the above analysis to use when trading gold based on what method they prefer. This web site will mainly focus on technical analysis methods and traders can learn all the trading analysis topics that they require to know before they start trading gold. Traders can open a demo practice trading account & learn how to trade with trading analysis using their demo account. Traders then can practice trading with these concepts on this demo trade account until when they gain enough knowledge and experience to trade the market profitably using this trading analysis method.

For fundamental analysis traders need to know about the different economic data reports, by using an economic calendar that can be found online, traders can keep up to date with the upcoming news events and then they can learn how to use the economic data reports to know what trade to open based on the outcome of these news announcements. Traders who decide to use fundamental analysis will have to do some practice on their demo trade account so that they can gain enough experience on how to interpret these economic data reports and know how to trade these reports profitably.

Learn More Topics and Tutorials:

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Forex Seminar

XAU/USD Broker

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