XAUUSD (Gold CFD) is an instrument that follows the spot price of Gold. It is a short term oriented instrument and ideal for swing trades in the gold market.
Gold is typically an inflationary hedge, and traditional store of value. While fundamentals are usually not a consideration for this swing trade strategy, Gold has a lot going for it. There is a shortage of the physical metal which will eventually put pressure on the paper instruments, and we are going into a seasonal time where there is usually a higher demand for the metal.
The recent price structure (double bottom off of 1675) has established a bullish reversal formation. While today’s candle may look unattractive, it does not change the recent momentum. IF this structure stays intact, Gold can test the mid 1800s over the next month.
It is important to note that the buy stop for this idea is at 1775. That means price MUST reach this level before this trade becomes active. ALSO, if the 1755 stop loss order is reached BEFORE the trade becomes active, the stop does NOT cancel out the trade idea. The purpose of the stop loss order is to control risk once the position is ACTIVE.
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Here is the swing trade idea:
Buy Stop: 1775
Stop Loss: 1755
Target 1: 1795
Target 2: 1815
Target 3: 1835
Please keep in mind it is very important to respect the stop loss order. Risk is the only variable we can fully control in this game, and if you do not have any regard for it, you expose yourself to the vulnerability of the market. Control risk well and a bi product of that is a consistent return. Again, the stop loss order is only active once the trade is in play which means 1775 needs to be taken out first.
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