Trade Forex Trading

When Not to Trade Gold

There are times when you should not trade XAUUSD because at these times the market becomes illiquid and hence also unpredictable. Illiquid means that there are fewer traders compared & analyzed to other regular times. The times not to trade the market are:

  • News Time

Scheduled economic reports are released throughout many times during the month. These can be found, in advance on a XAUUSD Calendar

There are 3 categories of news; yellow, orange and red, each category having a different impact. High impact fundamental news can really move the prices, sometimes causing a spike in both directions, before moving towards one direction. These are high risk times where a lot of people get stopped out.

However, it isn't just the announcements themselves that can affect the trading market. The sentiments and predictions/forecasts of what the numbers will be can cause the prices to move in anticipation. It is thence not a good idea to trade during news hours.

Some major economic news like the NFP & Interest Rate decision can cause extreme market volatility which's extremely hard to trade and can cause extreme movements in markets within seconds.

Economic data can cause a lot of speculation and hence a lot of gold price movement.

  • Weekends

A lot can happen over the weekend leading to the market opening with a large gap. This can cause a big difference in your account.

  • Market closing times- NY closing

At the close time a number of trade positions are being closed or being swapped. This will lead to volatility in gold prices & can cause the price to move erratically.

  • Asian Market

During the Asian session volumes are very low and the market move in a range of about 20 to 30 pips and it becomes very hard to trade the market because the prices falls flat. Unless you're trading JPY and AUD xauusd it is best not to trade at this time.

  • Holidays

Do not transact during Holidays. This is because the Banks are closed and therefore less participants in the market. If banks close for a holiday then the volume of trades carried out is greatly reduced. This can lead to low market volatility.

Holidays like Christmas and new year traders shouldn't trade on these days & should take time off during the week of Christmas upto new year, date two when banks resume their operations. An Economic Calendar will include a schedule of bank holidays and traders can keep updated: Examples of a Financial Economic Calendar.

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