Gold Technical Analysis Tools Used in Day Trading Analysis
Gold analysis tools are used in day trading analysis of price movements. These analysis tools are used to identify the price movement of prices.
Gold traders then use this analysis to determine when to open trades & also when to close trades.
Technical analysis attempts to forecast the direction of the price based on past price movement using charts.
The most popular analysis tools used for day trading are:
Gold Moving Average
Gold moving average indicator is one of the most popular analysis tools used in gold trading.
The MA technical indicator is used to calculate the average of trading closing price and this average is then plotted as a line on the charts.
This moving average line will show the general price movement whether the movement is moving upward or moving downwards.
Gold traders will use shorter term moving averages and combine them with longer term moving averages and the use these two moving averages to generate signals.
Buy signal - shorter term moving average crosses above longer term moving average
Sell signal - shorter term moving average crosses below longer term moving average
This moving average tool is used by trader to generate buy and sell signals and also to determine when there is a market trend.
Gold RSI
RSI indicator is a analysis tool which indicates the strength of the current trend.
The RSI technical indicators show when prices are closing higher than where they open and also when prices are closing lower than where it's that they opened.
RSI 50 center-line level is used to generate buy & sell signals. RSI technical indicator values above 50 indicate a buy signal while RSI indicator values below 50 indicate a sell signal.
Gold MACD
MACD indicator is used to identify trends as bullish or bearish. Bullish trend is when the MACD indicator is above the MACD zero centerline and Bearish trend is when MACD indicator is below the MACD zero centerline.
MACD is also use to analyze the momentum of the current trend - in an upward trend MACD indicator will remain above the MACD zero center-line for a long time & in a downward trend MACD indicator will remain below the MACD zero center-line for quite some time.
Gold ADX
ADX technical indicator is used by traders to determine the momentum of the current trend.
ADX technical indicator values above 20 signal a strong trending market.
ADX values below 20 signals that the market is not trending & there is no trend.
ADX indicator is a directionless indicator & this indicator only indicates if there is strong trend or not - in most platforms ADX indicator will include +DI & -DI lines which will be used to indicate the direction of the trend so that traders can know in which trend direction the market is moving towards when they are trading with this ADX indicator.
Stochastic Oscillator
Gold stochastic oscillator indicator is used to analyze the momentum of the price and stochastic oscillator is used by trader to determine overbought and oversold levels in the price. Stochastic oscillator values below 20 are considered as oversold & stochastic oscillator values above 80 are considered as overbought.
