Which Gold Trading Strategy is Right for You?

A lot of hard work and persistence is needed to fully learn and understand the best gold trading strategies. Not all traders are motivated enough, or even capable of, learning gold trading strategies that create success on the market. You can increase the probability of predicting that the price of gold will move in a certain direction by learning the following strategies:


Position Trading


Position trading is a wonderful strategy to use when first trading gold. It is easy to learn, not very time consuming and you don’t need a lot of start-up capital to invest. Position trading can be described as a ‘buy and hold’ method. Positions can be open for a few days, a few weeks, a few months, or longer. They are also held during periods of minor retracement with the expectation that they will eventually continue trending in the desired direction.


London Hammer Trade


The name of this strategy was taken from the London market, specifically the opening of the London market. Every day, price auctions of gold are made in the London Bullion Market which sets the benchmark for international prices for these metals. When the market opens, the price of gold has a rapid variation in its price. Investors either buy them or sell them first thing in the morning depending on what is going on in the world. This presents a great opportunity for traders to exploit the situation.




Hedging reduces the risk of investing in the gold market. This strategy reduces the usual risk of trading by taking two different positions on the same gold trade. For example, let’s assume you procure 1oz of gold. The prevailing spot price for gold is USD 2000.00/oz. To hedge against a rise in gold price, you can lock in a future purchase price (say USD 2010.00/oz.) by taking a long position in an equivalent number (equal to 10 ounce gold) of gold futures contracts. If gold goes downwards contrary to expectation, the gain you obtain from the future contracts will offset the loss. Hedging minimizes risk from the trade which allows you to maintain your capital.




Scalping is the strategy of aiming to gain from movement of a few pips in the market. It’s effective at making gains from very short trades using high leverage. This trade should be placed for only a few seconds a day. You need a deep understanding about the market conditions that underlie a specific trade. If your trade isn’t applied correctly, this strategy can result in a big loss in a very short time.

How to Trade Gold?

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