Basic Gold Forex Trading Strategy
There are many reasons to trade gold in the forex market. These include: 100:1 leverage on your trades, being able to trade at almost any time, high level of liquidity, and the ability to trade up or down. The question then is what gold forex trading strategy should you use?
Gold is currency in Forex
One of the things that is important to note is that when you are trading gold in the forex market it is considered currency, as is silver. These metals can be traded like other currency pairs, but only against US dollars. Just like exchanging other currencies, the trades are all done digitally. You never get any gold that you can actually hold in your hands.
Price Action Strategies
Because price action strategies are widely used to trade other types of currency within forex, they are also a good gold forex trading strategy. There are three main price action strategies that are commonly used.
1.Pin Bar Setup: This method has a high degree of accuracy when used in a trending market. One of the important things to know when using this setup is that the pin bars should protrude quite a bit from the surrounding price bars in order for the strategy to be effective.
2.Fakey Setup: This setup sets apart the amateurs from the professionals. It is designed to take advantage of when the market looks like it is headed in one direction and then suddenly reverses.
3.Inside Bar Setup: When using the inside bar as a continuation signal you can realize very big rewards with small risks. These bars are best used on weekly and daily charts. There is definitely more than one gold trading strategy that works. The more you learn about how to trade gold in forex, the more fun it becomes and more and more possibilities open up to you.