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Personal Note

Hi fellow gold trader, or potentially one, before start gold trading first and foremost, I would like to make a statement that you must keep in mind before we talk about my trading strategy:

Trading is not gambling nor entertainment, it’s an extremely tough profession where only 1% of all traders are profitable, so respect it and be fully conscious of every single trade you take. – SIA

Please keep that in the back of your mind, and never forget that you’re planning to become profitable in one of the hardest professions in the world: a full-time trader

Why Gold Trading?

Each trading instrument has unique characteristics and you will eventually understand that each one is a beast of its own accord. I am personally interested in the dynamics of the gold market and naturally gravitate to its dynamic nature, constantly reading news and checking my technical analysis on this precious metal, day in and day out. Everyone eventually develops a preference for certain trading pairs, and for me, it is gold (XAUUSD). To start gold trading, must read below information first,

The Most Important Lesson

Regardless of whether you end up trading gold or not, the most important lesson I hope you can take away from my own personal sharing, is that the combination of a proper trader’s mindset, a proven trading strategy that offers you an edge, and a plan to adhere with, is critical to be a sustainably profitable trader.

My Personal Trading Strategy

At this point, I hope you have the right mindset entering this sharing session, take notes and question every aspect until it makes sense to yourself. Let’s begin!

Trading Instrument: XAUUSD (Gold)

Starting Account Balance: 1,000 USD

Leverage Offered: 500:1

Lot Positions: 0.03 Lot Size

Take Profit Size: 30-35 Pips

Stop Loss Size: 30-35 Pips

Capital Risked Per Trade: $10.00 (1.00%)

Maximum Daily Drawdown: 3% ($30.00)

Daily Trade Quantity: 3 Positions

Trading Session: 02:00 to 10:00 (GMT+0)

These are the basic mechanisms you will need to know in order to enter each trade in this strategy. Please remember them by heart.

Now let’s move onto the heart of my gold trading strategy:

Supply & Demand Zones

Some people call it support and resistance, some call this S&D, but personally I call it a Supply & Demand Zone, or S&D Zone for short. Why so? Because this zone can transform from a support range into a resistance range after breakouts, vice versa. To me, this is simply a zone that has a high probability of being noted by institutional traders, either with aggressive market entries, or with high possibilities of large amount of passive limit orders.

So whenever I say S&D Zones, this is what I mean by that.

The trading plan is straightforward, when price goes into the S&D Zone, we wait for a reversal confirmation, we enter a countertrend position, and we wait for the S&D Zone to manage price volatility and push for a price reversal.

The hardest part about this strategy is the identification of a solid S&D zone that is respected by the institutional traders. But here’s a great starting point that is still used by professional traders:

Pivot Points

This works on any timeframe since the markets are fractal in nature. However, personally, I like to switch between Daily, 4H, 1H and 15m charts to have multiple confirmations on a S&D zone.

Look at the previous high and the previous low of the price chart and look for a strong momentum against the price action trend. Now switch to multiple timeframes to have multiple confirmations that this is a robust pivot point.

Once you’re done, mark down the S&D Zone on your preferred trading charts with a rectangle, extending it to your extreme right.

Do it for both the previous high and the previous low.

Once that is done, we will now move into the next phase:

Reversal Confirmation

Once we observe that price action is being pushed into the other direction, we prepare ourselves to enter a trade. Once the candles are formed that indicates a high possibility of a reversal happening, we enter the trade through market execution.

Now we take note of the entry price (EP) and enter our Stop Loss and Take Profit accordingly.

Now all that’s left, is to be patient and let the strategy play out for at least 15 minutes before looking at the charts again. Resist the urge to stare at the charts every minute as it takes a serious mental toil on you.

Trade Continuation

After 15 minutes, you can now observe the price action and note down some observations. Is price action going in your favor or against? Or is a doji forming?

Most of the time, since you entered at a position supported by a S&D zone, price should either be in your favor, or experiencing market volatility and going sideways. If so, let the trade run.

If in the lower possibility of price going against your position, take the opportunity to decipher the legitimacy of your S&D Zone. Is it a validated S&D Zone in the first place? Is the previous price action too intensive and needs more time to be buffered down? Take down notes and learn from this experience.

Whether your trade ends up as a Take Profit (TP) or a Stop Loss (SL), take the opportunity to learn more about the nature of the trade executed and optimize your preparation for the next trade.

Notes

I am constantly updating this page whenever I have the time to increase clarity on my exact strategy.

Meanwhile you can check out the other articles on my website below:

More Resources

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