One of the huge advantages of online gold trading is that there is a trading time frame that matches every type of trading personality. Whether you are a fast and feisty scalper who likes the thrill of 1-minute charts, or a thoughtful trader who makes methodical decisions based on the daily chart, there is a sweet spot for every trader.
Intraday traders use very short term charts, like 1-minute, 5-minute, or 15-minute charts. They make many trades throughout the course of the day but exit the market at the end of the day. By retreating from the market, they are not vulnerable to overnight risk. With lots of trading opportunities, traders are less likely to fall into a rut of having losing months.
However, because intraday traders have to pay more spreads, they will carry higher transaction costs. Intraday traders won’t reap large profits in a single transaction because of the need to exit at day’s end. It is easy to get burnt out by the mental strain of changing biases on a frequent basis.
Short-term swing traders generally use hourly time frames, like 1-hour or 4-hour. Swing traders have more opportunities to trade than long-term traders, and don’t need to rely on a couple big yearly trades to make money. However, they will have higher transaction costs than long-term traders, and they are vulnerable to overnight risk.
These online gold traders use daily and weekly charts to trade. The long-term charts can also be used to inform short-term trades, but generally they are used for trades that take place over weeks, months, or even years. The advantage for long-term traders is that they don’t have to monitor the minutiae of the intraday charts. Their trades are usually more thoughtful instead of instinctive. Successful long-term traders have patience, but need bigger accounts to ride the swings and cope with more frequent losing months. It all pays off in the end with a couple big trades per year.
Whether you are starting online gold trading for the first time or you are experienced trader who randomly settled on a certain time frame, it is best to try all the available time frames until you find the one that works best for your trading personality. Each one has its advantages and disadvantages, and once you find the right time frame for you, you’re on the path to online gold trading success.
How to Trade Gold?
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