Trading XAUUSD Using News Strategy

The FX News Trading strategy, borrowed from currency trading, works for XAUUSD too. In gold trading, people call it the Gold News Trading Strategy.

Economic news stories often cause big reactions in the currency exchange and gold trading markets because gold is traded against the U.S. dollar. These reactions give traders who want to profit from short-term market changes many chances to trade. But not all economic news is useful for trading: some reports matter more than others, and only the ones that greatly affect the price of gold compared to the dollar can be used with this news strategy.

The Economic News Reports from USA will be used to trade when using this strategy. The news reports coming From USA can be found on the schedule Economic Calendar, This Economic Calendar is provided online by online brokers & also the other online trading services providers, traders can search for this News Calendar online.

By consulting the Economic Calendar, which details scheduled economic news releases, traders can assess the potential impact of these announcements and determine whether they warrant trading activity based on the expected level of volatility surrounding these reports. These Economic Data News Releases are categorized by their significance using a three-tiered system: RED, ORANGE, and GREEN. Reports deemed most impactful are colored RED, the least significant are marked GREEN, and those falling in the middle are marked ORANGE.

The only business-related numbers that traders need to watch when trading are the ones in RED & those in ORANGE. Traders shouldn't pay attention to the GREEN ones.

General Approach to News Trading Strategy

There are two primary strategies that can be employed in gold news trading.

These two methods are:

Trading the Break Out Channel
Analyzing the Economic News Reports

Trading the Breakout Channel

Gold traders will set a buy stop pending sell stop above and below the Gold price respectively. These orders will be on both sides of the price so that when the Economic News Report is released one of the orders will probably be hit and if price continues moving in that particular direction due to this news report then the trader will make short term profits from this move.

News can cause big price swings. Both orders might trigger close together. A gold trader could lose on one position or even both.

Analyzing the Fundamental Economic News Data Reports

XAU USD traders can guess which way Gold will likely go by checking the Economic Calendar Fields, which are marked as Forecast and Previous. These two numbers are then compared and looked at with the Actual News Data Report that comes out, to help figure out which way the price is likely to move next.

XAU trades against the USD, so it's XAUUSD. Gold traders focus on U.S. economic news reports only.

Gold traders track news releases. They focus on real data and key economic stats.

If the released figures exceed expectations positively for the USD, online traders of Gold will short XAUUSD (Gold) - when traders sell XAU, they will concurrently be purchasing USD at the same time.

Should the reported figures result in an unexpected weakening of the USD, Gold traders dealing in XAUUSD will initiate a purchase of Gold (XAUUSD). When traders acquire XAU, they are simultaneously divesting USD at the same time.

Traders decide when to trade based on news reports. They check if actual data matches the forecast.

If you trade the news, the key thing is to analyze the previous news report, look at the forecast, and compare it with the actual data. That's how you figure out whether to enter a trade - and which way to go.

Because many gold traders will be preparing to trade Gold when these news announcements are about to be announced or soon after the news reports are released, these news announcements will cause a lot of ups and downs in the market, which will give traders a helpful chance to trade. News traders can then find out the best way to set up their trading when trading during these economic news reports by learning more about these 2 news trading methods and practicing on their Gold training demo account.

A XAUUSD news trader will keep track of all the USA economic news announcements by using the Economic Calendar. This calendar has a schedule of when the news reports will be released and also the past news reports and the predictions of these news reports. These economic calendars will keep this schedule and show it well in advance and this way a gold trader will know when there are scheduled economic news announcements coming up.

A trader uses this schedule before news comes out and uses the same Economic Calendar to see the data after the reports are released: the economic calendar is also updated instantly.

Financial experts put together the Economic Calendar by studying reports and economies from around the world. Because they have this News Calendar, traders can plan when to trade based on the economic data ahead of time. Traders can find an Economic Calendar by searching online for "Forex Calendar" or "News Calendar," and they will find a few of these trading calendars hosted online on different broker websites or other trading sites.

About Economic Calendars

An News Calendar will usually have 3 readings:

Previous Data | Forecasted Value | Actual Result | News Item

Previous Reading lists the last economic data value. Reports use numbers or percentages.

Forecast: The predicted value for that specific piece of news information is shown in the news report, as predicted by economic specialists. Before the day of the economic data release, this figure is predicted in advance. The forecast numbers will be presented by Economic & Financial Analysts.

If the forecast number is better than previous for USD, traders sell Gold
If the fore-cast number is worse than the previous for USD, traders will buy XAUUSD

Actual News Data Report

This will show if the price will go up or down a lot, or stay about the same.

If the actual data that comes out is the same as what was expected, then the prices of XAUUSD will not move very much, because Gold traders already knew about this information and already made trades based on the news data reports even before the actual information report was released.

When the actual news release deviates from previous projections, it often surprises gold traders. If the reported data does not align with expectations, online traders must reposition their holdings, which typically incites a sharp price correction in the opposing direction.

If the actual number is much better than what people thought, then the Gold price will likely keep going in that direction and speed up. Likewise, if the real news is worse than what was expected, the price will also keep moving as it was before the news came out, but it will now go faster and further in that direction.

For instance: New information only impacts the market if its content deviates from prior expectations upon its announcement or release. If the reported data matches expectations, it will have no discernible effect on the currency pair, as the information is already public knowledge and factored into current pricing.

To utilize basic research when checking out news articles, you need to first learn about the signs that show how the economy is doing. Market experts create a schedule that includes all financial news. Market experts also use this schedule to guess what different news stories will say. Market experts give these guesses. This can really change the market price. Gold traders will pay close attention to news information that greatly affects the money markets and use this information to change their trades.

When are USA economic news data reports released?

8:30 am - 10:00 am EST

Key US Fundamental Economic News Data releases occur between 8:30 am and 10:00 am Eastern Standard Time. Gold market participants can plan their trading activities around these economic news releases during this specific timeframe.

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