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5 Tips for Trading Gold (XAU/USD)

As forex traders seek out stable investments that can hedge against inflation, market instability, and other geopolitical factors affecting currency prices, gold has grown in popularity over the past few years. Traders can use gold as a way to hedge against other investments, or as a safe haven that provides greater consistency over time and is more resistant to dramatic swings in valuation than many other currencies are.

XAU/USD is one of a number of gold pairings forex brokers now offer, making it easier than ever to incorporate gold as part of your forex trading strategy. If you’re eager to make better use of gold and capitalize on potential profit opportunities, here are five trading tips to keep in mind.

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Your #1 Trading Goal

The bottom line is that money management will make or break you as a trader. This is a widely accepted fact.  Proper money management rules have been proven over long periods of time and are not secrets to anyone. The rules of ‘keeping your trades small’ and ‘cutting losses’ for example, have worked for hundreds of years, yet many people ignore them. 

No matter what aims you may identify when first determining what you are setting out to achieve with your trading, all aims are secondary to your primary goal — preserving your trading capital. This is by far the most important aspect of successful trading. Simply stated, you need capital to trade.

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EUR/USD Day Trading Strategies

As the two largest currency markets in the world, the EUR/USD pairing offers excellent liquidity for forex traders of all types. While the pairing has seen periods of high volatility—most notably in 2010 and 2011, due in part to Greece’s economic crisis—the recent trading history for this pair has seen lower volatility and tight spreads.

This lack of volatility can be a challenge for day traders, since stable prices for the pair can limit a trader’s potential profit margin. The risk is lower, but so is the potential reward. Despite this overall stability, there are still opportunities to capitalize on EUR/USD volatility by paying attention to price movements and tracking potential market triggers.

Here’s a look at some possible day trading strategies to deploy with the EUR/USD currency pair.

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Currency Pair Trading: How and When to Trade USD/JPY

With high liquidity and low bid-ask spreads, USD/JPY is a popular currency pair for experienced traders as well as beginners. Since the financial crisis in 2008, Japan’s yen has demonstrated itself as a reliable reserve currency, becoming the world’s third-largest safe-haven currency in recent years. The USD/JPY pairing also plays an important role in trading activity throughout Asian markets, since JPY is often bought or sold as a substitute for more unpredictable currencies in the region.

Because JPY is the leading reserve currency in the Asian market, its high liquidity is a benefit to traders looking to capitalize on market movement in countries whose currencies would otherwise be tougher to trade—especially at a large volume. Even though the USD/JPY pairing offers greater stability and liquidity than other pairings, traders should still study the market factors that can affect price movements.

Here’s some insight into the timing considerations and other market influences to watch when trading USD/JPY.

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Timing is Everything

I believe one of the most often overlooked yet simple decision to make when developing your trading plan is the timing.  What will your trading style be like and what type of trends will you look to trade?

I also believe this is critical as trying to trade a wide range of trading styles and time frames at the same time, becomes counter-productive.  It makes it difficult for the trader to focus on one approach and master that approach. 

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Negative Balance Protection: Why It Pays to Trade With Valutrades

In contract for difference trading, market movement can happen fast. In best-case scenarios where traders are on the profit end of that movement, this can mean significant earnings potential within a short span of time.

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6 Common Misconceptions of Forex Traders

As one of the largest global marketplaces, forex attracts a large volume of traders of different backgrounds and experience levels. Naturally, a market this popular also has its own mythology. Below, we’ve debunked the six most common misconceptions of forex traders.

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Gaining an Edge

There are numerous scientific studies alleging that forecasting market movements is practically impossible. In 2013, Eugene Fama, Lars Peter Hansen and Robert Shiller got the Nobel Prize in Economic Sciences for a study that questioned our abilities to accurately forecast short-term asset price changes.  This raises the question of how traders can gain an edge in the market and consistently profit. 

I personally use technical analysis (the study of price action) to identify trading opportunities.  I think it is important to distinguish what we are doing as traders - as a technical analyst however, at no time do I attempt to forecast – I think this should be left to economists

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Common Chart Patterns: A Forex Cheat Sheet

Making money on the forex market—or any other exchange, for that matter—can certainly be tricky. But thanks to a number of chart patterns, you can learn to anticipate price movements and act accordingly. Making money doesn’t have to be impossible.

Unfortunately, with so many different patterns out there, it can be difficult to figure out which ones are best for determining where prices will go in the near future.

To make your job easier, we’ve outlined five of the more helpful continuation and reversal patterns below in a forex cheat sheet. Become familiar with each of them to make better trades.

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End of Day Forex Trading: How to Find Signals and Potential Breakouts

 

In trading, timing is everything. You might be able to anticipate market changes, but if you don’t know when those changes are scheduled to occur and how to time your entry and exit points accordingly, you aren’t bound to reap the reward. The most reliable and profitable forex strategies are those that consider timing as it relates to the trader’s chosen market, strategy, and trading style.

End-of-day trading is a deliberate forex strategy in which traders choose to place trade orders after the New York stock market has closed for the day. This allows them to outline their strategy and create pending orders for the next day while time is effectively paused (i.e., when no trades are occuring).

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