Do Forex trading and Gold trading use the same techniques (Technical Analysis)?

Beginner Questions Candlesticks, Chart Patterns, and Price Action
1

Hi there, I’m new to trading and struggling with 2 questions here:

  • Can we apply the Forex trading’s systems and techniques (Technical Analysis) to Gold trading?
  • Is it common to trade gold on the Forex platform (XAU/USD)? Or is there any better option for Gold trading?

Some online gurus claimed their techniques can be used for both. Some said these two need different approaches. My long-term goal is to be able to trade both Forex and Gold. I’m confused and not sure where to start.

Any helps will be appreciated.

Arada

2

Hi, there are some differences between forex and commodities e.g. ranges but you can successfully apply the indicators or price action in the gold market. Forex brokers support gold trading mainly on MetaTraders platforms but if you want , you can try trading on multicharts or ninja trader. Regards Greg

1 Like
3

Yes. Technical analysis is the study of price action. Anything w/ a price can be analyzed.

Depends on the broker and the executions you have access to. Gold can be traded:

Physical (Bullion)
Futures
Options on Futures
ETFs
Options on ETFs
CFDs

Lots of options.
Why do you want to trade gold specifically?
Binary

1 Like
4

Glad to know. Thank you, Greg!

5

Thank you for clarifying this for me. There’s no special reason for this. I just want to keep my options open. :smile:

1 Like
6

Different markets have different nature and you just have to understand the nature of the market. However, you can apply the same technique of price action to trade forex and gold and also to other markets as well.
I am trading gold on the Meta trader platform only and it is all good.

7

You could argue that gold is a currency and so is part of the Forex market anyway.

As for whether you can use TA with it - most definitely yes.

I’d go as far to say that gold is a much better market to trade than forex too although that’s my opinion only.

As for fundamentals who has a clue why FX moves as it does, but with gold there really is only ONE driver - negative real rates - everything else is noise.

3 Likes
8

Thank you for your reply. Do you know if we can trade gold on Meta trader without CFDs?
If possible, I’d like to avoid CFDs.

1 Like
9

the market movement history for them are different and obviously you will have to change the technique for each of them.

10

Thank you for your insight. I’m still a novice in this but also planning to trade gold, rather than forex, in the future.

Do you trade spot gold, gold futures or gold options?

11

I trade spot gold.

Should be interesting watching what happens with gold tomorrow.

The chances are it will get slammed on the Fed rate decision today - then the market will have a rethink tomorrow and could start to move higher.

Of course that’s just a guess, but it usually plays out like that after the Fed meeting.

Watch that red high from yesterday - could well turn out to be an important pivot.

12

1900 has been real sticky (looking at monthly chart).
This breakdown below 1750 (looking at H1 chart) has been interesting to watch.

XAU has been basing since late FEB and we’re right off the heels of a hard rally today back @ that breakdown level.

The pull back from 2060 (looking at D1 chart) has been orderly for the most part, and rather corrective with a few bouts of impulse selling.

Do you have short/med term price targets?

13

Thanks for pointing this out. I’m still early in my journey. Any quick tips for some specific techniques on gold I should pay attention to.

14

I’m interested to see the gold’s direction after the Fed meeting too. I keep checking the chart all day. :slight_smile:

By the way, do you know if it’s possible to trade spot gold without CFD? If yes, will you be able to suggest a broker/platform?

15

@FOREXunlimited

Wow, that’s a really thorough analysis and one that goes completely over my head.

I can’t grasp monthly charts in the same breadth as the hourly.

For me, it’s quite simple.

The market made a lower low that the previous day, reversed (probably on the dovish Fed talk) and took out the high of the previous day.

So I’m long.

I mentioned this strategy in a recent blog post of mine.

I’ll remain long until I’m stopped out not a minute sooner or later.

The idea of price targets doesn’t work for me for two reasons.

Firstly, I really suck at more traditional types of technical analysis. Secondly, the moment you add price targets there is always the risk of psychological trading trauma if the target isn’t reached.

This is summed up perfectly in the story of the Fur coat in Remincieces of a stock operator.

The chart below is an hourly chart - I don’t use hourly charts but its there to illustrate in more detail how I got in.

The top line is my buy.

The bottom my initial stop loss.

image
image989×813 11.7 KB

Where Gold goes from here, I’ve no idea - maybe just sideways.

Let’s hope though that the flying saucer pattern talked about by @Dennis3450 in a previous thread pans out and we can all get rich!!!

3 Likes
16

Hi @Arada

Not sure if you reside in US or UK or somewhere else.

If your stateside you won’t get CFDs anyway (direct competitor to the options industry).

I personally use FXCM and have no complaints. I think I am trading spot gold with them, although you never know for sure.

I’m not so sure though why the disapproval for CFDs though. All my stock & index trades are with CFDs.

I know there is a bit of a snobbish attitude about trading real forex over CFDs, but in my experience, that isn’t justified.

When it comes down to it we are all dirty speculators anyway. I for one don’t care which instrument I use.

I started off with Financial Spreadbetting, and to CFD traders, we spreadbetters were the scum of the earth.

If you go to my blog under the category technical analysis, you will see a number of simple strategies, I use or have used to trade the gold market.

It’s a great market to trade.

Cheers

1 Like
17

I trade spot Gold through OANDA and use the same analysis as any Forex pair, or commodity for that matter.

It’s back in a familiar range, and at that 1750 level.I posted my analysis 2 weeks ago using the daily chart:

image
image1701×751 64.8 KB

Hard to say if it will break out or like @Johnscott31 said, bounce around a bit.

On the 1H chart I have price coming up to a supply zone (if anyone uses S/D zones), so IMO price needs to get over that hurdle to continue upwards.

image
image1704×750 59.5 KB

18

@MattyMoney The weekly chart (according to my very crude analysis) looks quite positive.

Ive certainly seen markets rally for weeks from this type of pattern.

Don’t won’t to get ahead of myself - but when these price patterns break out coinciding with Fed rate decisions it can be quite positive.

I’m not trading the weekly charts on gold right now, but that would have been one for me

1 Like
19

Hi John,

Thanks again for your insight. I’m residing in the UK. As I’m relatively new to trading, I still don’t know much about CFDs and surely need to explore deeper.

As I go to your website, I’m surprised to to learn that you live in Chiang Mai. It’s kind of my hometown! I can relate very well when you talked about being a farang in the old city, the 75 baht exchange rate, and the painfully slow internet in those days. Lol

Well, as a newbie, I think I can learn something from your posts and trading style. Do you use FXCM for trading gold/stocks from Thailand?

I know of someone who’s trading gold in CFDs with XTB from Thailand and she claims that she’s recently made over 1 million THB per day consistently. Is it really feasible?

By the way, I’m waiting for you Trading journey part two…

20

@Arada

Lol

I’m working on my trading journey part two right now.

As for Chiang Mai, yes it’s a great place to live. I consider myself very lucky.

@steve369 also lives here

My trading account is based out of the UK. I have looked at trading single stock futures for Thailand, the thai gold futures market and the SET index - the single stock futures interest me but have not taken the plunge yet

CFDs are allowed here but the brokers concentrate on the same markets as every other broker.

As for someone making a million baht a day trading the market yes it’s possible, many do it.

My advice though is to take that all with a pinch of salt. Personally I suspect anyone who ever even mentions how much they make.

Anyone with half a brain usually keeps that to themselves.

In life as in trading focus on the process, not the rewards.

That is the only way to ever sustain the rewards anyway.

Incidentally I just got my butt handed to me on a plate twice with gold this week. Trading can be a tough old business at times.

It’s real important to take your losses quickly, something most beginners struggle with.

2 Likes