100 Period Moving Average Strategy
A trader can choose a moving average to trade with based on the gold chart timeframe that they use for trading; a trader might choose the moving average to trade 1 minute chart, 1 hour gold chart, 4 hour gold chart, day xauusd chart or even weekly gold trading chart.
A trader can also choose to average the closing gold price, opening gold price or median gold price - when choosing a xauusd moving average indicator.
Moving average xauusd indicator is oftenly used to measure strength of xauusd trends. The data of the moving average is precise & its output as a line can be customized to the preferences of a xauusd trader.
Using the moving average xauusd indicator is one of the basic xauusd trading strategies to generate buy and sell signals which are used to trade in the direction of the trend, since the moving average indicator is a lagging indicator & a xauusd trend following indicator. The Moving average xauusd indicator as a lagging xauusd indicator means that moving average will tend to give late xauusd signals as opposed to leading gold indicators. However, the Moving average indicator as a lagging xauusd indicator gives more accurate xauusd signals and is less prone to xauusd trading whipsaws compared to xauusd trading leading indicators.
Traders choose the moving average period to use when trading with this moving average xauusd indicator depending on the type of xauusd style they use: short term, medium term and long term.
- Short term xauusd: 20 Period Moving Average Strategy
- Medium term xauusd: 50 Period Moving Average Strategy
- Long term xauusd: 100 Period Moving Average Strategy
The period of the xauusd trading moving average in can be measured in 1 minute chart, 1 hour gold chart, 4 hour gold chart, day xauusd chart or even weekly gold chart. For our xauusd strategy example we will use 1 hour xauusd chart period.
Short term moving averages are sensitive to gold price action and can identify xauusd trend signals faster than the long term moving averages. Shorter term moving averages are also more prone to xauusd whipsaws compared to long term moving averages.
Long term moving averages help to avoid xauusd trading whipsaws, but are slower in identifying new xauusd trends and xauusd trading reversals.
Because long term moving averages calculate the average using more gold price data points, the long term moving average does not reverse as fast as a short term moving average and it is slow to catch the changes or reversals in the xauusd trend. However the longer term xauusd trading moving average is better when the xauusd trend stays in force for a longer time.
The task of a trader is to find a moving average period that will identify xauusd trends as early as possible while at the same time avoiding fake out signals - xauusd trading whipsaws. As a trader you will need to first test different xauusd trading moving average periods before deciding which xauusd trading moving average period is best suited for your trading method based on the results of the testing that you will do using different moving averages.
XAUUSD Trading Moving Average Strategy
Moving average xauusd indicator is a trend following xauusd indicator that is used by traders for three things:
- Identifying the beginning of a new xauusd trend
- Measure the sustainability of the new xauusd trend
- Identify the end of a xauusd trend & signal a xauusd trend reversal
The moving average xauusd indicator is used to smooth out the volatility of gold price action. The moving average indicator is an overlay indicator & it is superimposed on the gold price chart.
On the moving average gold trading example shown below - the blue line represents a 20 period moving average, which acts to smooth out the volatility of the gold price action.
20 Period Moving Average Strategy - 50 Period Moving Average Strategy - 100 Period Moving Average Strategy
Calculation of the Moving Average XAUUSD Price Period
The moving average is calculated as an average of gold price using the most recent gold price data point - xauusd trading periods.
If a moving average uses the 20 period to calculate the moving average then it is referred to as a 20 period moving average, because most traders use the day xauusd chart as the standard gold price period we shall just refer to the moving average as the 20 day moving average.
To calculate the 20 day moving average the gold price of the last 20 days is averaged - and the average is then updated constantly after every new gold price period closes. So after every new gold price period close is formed the average is then re-calculated afresh using the most recent 20 gold price periods, that is why this xauusd indicator is called a moving average because the average is constantly moving when price data is updated and re-calculated.
