3 Key Tips for Trading Gold

[00:01] one of my favorite things is and continues to be gold and I want to talk that I've learned over my years of doing so this might help some of the new traders who are fascinated with trading gold it is a wonderful trading vehicle

[00:16] if you know how to use it but it's kind of like that big bowl at like the party it's really impressive when somebody can stay on there and ride it effectively but it's really hard to stay on gold is a crazy volatile asset and uh moves very

[00:29] unique ly to some of the other things that are out there in financial markets let's jump into a couple key points to know when trading gold the first thing I gold is that gold typically makes the majority of its moves in very quick

[00:43] short bursts what I mean by that is most of the time if you look at a weekly chart which is what I've got pulled up here gold actually goes pretty sideways it just chops back and forth and then you can see there are brief periods

[00:56] where gold makes massive singular Direction moves whether that be up or down gold typically goes into periods of large amounts of consolidation without much movement and then perhaps like what we're seeing here recently explosive

[01:10] price action in One Direction that seems Relentless at times first of all before we move on from this topic let's think about the nature of gold and why this would actually make a lot of sense gold trades on fear and fear is the key word

[01:24] for getting gold to really move one way or the other and what I mean by that is if there are a lot of tense things going on in the world like um you know central banks hiking rates incredibly fast and you know people afraid of a sudden huge

[01:39] recession or hyperinflation or war in the Middle East or War somewhere else in the world the point is these factors all have a common theme fear typically drives price of gold higher but most of the time you know we live in a world

[01:54] where fortunately um you know we're not constantly in chaos it does seem like in recent years we've had a lot of chaos but there's plenty of periods of time normal and not everything is freaking out and panicking and those are going to

[02:06] thing I'm going to say is that if you trade gold on a consistent basis I know a lot of Traders love to trade this uniquely like this is the one thing they of time you are in if you are in a chaotic you know highflying environment

[02:21] if you're in a very confident time you're going to probably see gold ranging or even trending lower one of the most obvious ways I could showcase my point here is let's think back to 2008 2008 2009 we saw the great

[02:35] financial crisis across the world this was a devastating time when the world saw the US housing market blow up and you know Banks went under and the world got terrified and following that period we saw one of the most aggressive bull

[02:49] markets for gold that we've ever seen in just a short you know burst we saw the price go from 690 or so here all the way up to 1,900 in 2011 and then after of years you can see gold drifted back lower range bound you know didn't move a

[03:05] whole lot so understanding your environment is incredibly important in 2020 we saw something similar everybody got really spooked out about the idea that you know the world supply lines were getting shut down due to covid-19

[03:18] and again the market ripped higher for gold and then proceeded to Once things consolidate and even go sideways for a number of years Point number two on how to trade more effectively is knowing

[03:31] your fundamentals fundamentals are key when talking about gold perhaps just as much as any other Financial instrument in the market whether you're talking about the dollar the S&P 500 gold gold is incredibly based on fundamentals uh

[03:46] in the market so what I'm talking about here is things like interest rates geopolitics what the central banks around the world are doing are they cutting interest rates or are they raising interest rates uh and other

[03:59] economic data are economies of the world looking strong or weak typically weaker economic data or central banks that are looking to loosen their monetary policy is typically pretty strong for the price of gold which is why we've seen um

[04:13] things you know ramping up here for gold just recently we've seen central banks around the world looking to cut interest rates and we see the economies around the world cooling a little bit that combination is usually a pretty strong

[04:26] area uh for gold we could also reference real interest rates which considers inflation relative to the nominal interest rate set by central banks of course the big ones here are looking at the Federal Reserve the ECB uh but also

[04:39] other central banks and other economies of the world like not just the Western powers like looking at China and looking at um you know other key players on the board the final thing I want to say when trading gold here is a really important

[04:51] tip for you gold can often go much farther than you expect and me for that actually set out a target for gold around

[05:03] $2,280 an ounce in fact we'll roll the clip from that video when I said that going into the new year the reason 2280 is my target is because the last time we is my target is because the last time we broke a longterm High over here we saw a

[05:18] broke a longterm High over here we saw a move following that close above of like 13.8% now this was back in 2020 when huge fear took over the market so I huge fear took over the market so I think that that 14% that move is a bit

[05:31] uh aggressive in terms of what we could see this year but again many possible catalysts are looming under the surface so for me in terms of possible setups what I'm looking for is if we do if we did see a a break of the highs and a

[05:44] close Above This long-term high of like 260 an ounce if we do start to see that come into play this is a 10% move from the highs so a 10% move approximately

[05:56] from this this recent struggle high that we've had we wed higher but I don't you know I'd like to see if we were able to break that long-term high meaningfully of about 10% move that would get us at around 2280 an ounce which a 10% move I

[06:10] think is is a reasonable uh expectation if we do see rate Cuts or any sort of uh recession fears election fears Etc that we've talked about in this video so far so at the time of recording this video it's only April so obviously gold could

[06:25] have much more room to go but my target for the year has already been hit that just goes a show Even after doing this for years and years trading gold uh there is much to learn and it always can do more than you ever expect that's the

[06:38] that's the crazy component to trading gold and I've Incorporated that into my cons I would I would encourage people to consider this concept with gold 2 if you're going to trade it it can go much further than people expect so how do I

[06:52] approach that well I usually when gold is in a trending environment I opt to Trail stops which means I let the market tell me when it's time to get out so you can see I entered a gold trade back here and a second one on this pull back here

[07:06] consistently Behind These Market structure levels that I've shown uh across my chart here and this is my current position on gold I also have an series on oil maybe I'll do that next but for now you can see I'm up pretty

[07:20] good on gold this is uh GLD the ETF that I trade to track the price of gold but overall you can see that spot price has just been exploding higher and and I do that's why I Trail stops I'm letting this thing run and I think that a lot of

[07:35] Traders do the exact opposite when trading gold and it gets them into a ton of trouble many times Traders go exactly against the trend of gold and that is one of the most dangerous trades in the market that is only preceded there's

[07:47] only one trade that I think is harder in the financial market and that's shorting the equities Market stock market you know NASDAQ S&P Dow I find that to be but gold is a close second if you're selling gold on a huge

[08:01] rip rest in peace to you and uh you know uh godp speed anyways hope this was hit that Thumbs Up Button And subscribe and if you want more fundamental data I mentioned how key fundamental analysis is we have a tool on our website A1

[08:16] and the edgefinder helps Traders spot economic data uh sentiment Trends you fundamental data so if you'd like to trade gold the way I do again check out

[08:28] and learn more about the edgefinder thank you guys very much for watching looking to improve as a Trader we've got some cool free resources here that I video down below in the description there is a link to join our Discord

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