XAUUSD Forex Indicators | Myfxbook (2024)

FAQs

Which indicator is best for XAUUSD? ›

So, factors like GDP growth, inflation, employment data, interest rates and the monetary policies of the world's more influential central banks all affect the price of gold.

For a standard lot of XAUUSD, which is 100 ounces of gold, the pip value is $0.10. For a mini lot, it's $0.01, and for a micro lot, it's $0.001. Therefore, based on the parameters provided, the lot size for trading XAUUSD with a risk of 1% on a $10,000 account balance and a 50-pip stop loss would be 20 mini lots.

Relative Strength Indicator (RSI)

RSI is great for confirming a trade decision with gold. If you find an entry for buy position, you can check the RSI value for confirmation. If the RSI is above the 70 level, you may want to reconsider this buy trade, as gold is in overbought territory.

📈 Trend Trading

The concept of this strategy involves identifying and following the prevailing trend in the XAUUSD market. Traders buy when the trend is upward (bullish) and sell or short-sell during a downward (bearish) trend. The main focus is to capture gains through large movements rather than small fluctuations.

In this strategy, a trader would look to buy gold if a shorter-term moving average crossed above a longer-term moving average and sell when the shorter-term moving average crosses below the longer-term average.

According to the World Gold Council, gold's movement is often correlated with the stock market during "risk-on" periods and not correlated to periods of market stress. Note that the correlation between two assets can change over time, and the World Gold Council's claim is as of September 2024.

How is gold traded on the market? In the forex market, gold is traded as XAU/USD and is open for trading 24 hours from Monday to Friday. Traders looking for optimal times to trade should consider the North American trading session (3 pm – 11:00 pm GMT+3) as it records the highest trading volume and volatility.

How to make profit in XAUUSD? ›

Because gold price is considered to be highly volatile, traders try to make market profits by buying the commodity when the price is low and selling when it is high, or going short the precious metal when prices are expected to fall.

A 0.01 lot, also known as a "micro lot," is the smallest standard lot size in forex trading. It represents 1,000 units of the base currency, which in the XAUUSD pair is gold.

The pip value of 1 units of XAU/USD is US$0.10. The 1 pip size of XAU/USD is 0.1, so if the XAU/USD price is 1.2, the 2 represents 2 pips.

What is the lot size for gold? The lot size for gold is the amount of gold you will be buying or selling and is usually expressed in troy ounces. One standard lot (1.0) on TIOmarkets MT4 or MT5 trading platform represents 100 ounces of gold. One mini lot (0.1) represents one tenth of a lot, or 10 ounces of gold.

Relative strength indicator (RSI)

It is a useful tool to identify when a trading instrument - in this case, gold - is overbought or oversold. If the RSI drops below 30, we would say that it has entered oversold territory. On the other hand, an RSI value of 70 and above would indicate overbought conditions.

How to Choose Time for Trading Gold. The most active XAU/USD trading takes place during the North American trading session (3 pm – 11:00 pm GMT+3). Slightly less activity is observed during the European session (10:00 am – 6:00 pm GMT+3).

The XAUUSD scalping strategy has a Stop Loss and Take Profit. So, when you enter a short trade and sell, you have to put a Stop Loss $30 above your entry point and a Take Profit of $25 below the entry.

Which is one of the most accurate trading indicators? The most accurate for trading is the Relative Strength Index. It is considered one of the best momentum indicators for intraday trading. It helps investors identify the shares which are bought and sold in the market.