Gold is a haven asset and is also a popular investment channel today. Associated with it is the “king” currency USD, which is at the top of the foreign exchange market. So why not quickly learn and trading XAUUSD to create big profitable business deals for yourself? If you are interested in this investment portfolio, let’s Learn Forex Trading more about XAUUSD Investing in the following article.
What is trading XAUUSD in the Forex market?
To help readers understand the basics of the Trading XAUUSD investment portfolio. First of all, we will learn about what the concept of XAUUSD is. In Forex, XAUUSD is the symbol for the gold exchange rate compared to the US Dollar in the market. Each unit of gold (calculated in Ounces) will be expressed as the corresponding USD price. So why is XAUUSD called that? Because:
- “AU” is the symbol for the element gold in Latin
- “X” is the suffix representing the word Forex in foreign exchange
- “XAU” combined is the type of gold asset in foreign exchange
- “USD” is the currency unit of the US Dollar.
From there, we can understand that Trading XAUUSD is investing in the XAU and USD currency pair.
See more: You will regret not knowing about XAUUSD
Development history of XAUUSD Investing
The history of gold has long roots, dating back to ancient civilizations. Despite the rapid development of financial markets in the years of the twentieth century. This asset class still maintains a prominent position. Until the Great Depression and World War II, gold prices were subject to significant fluctuations.
However, just after the end of the war, the Bretton Woods Agreement was established and allowed the US Dollar to be converted into gold at a fixed exchange rate of $35/Ounce. After the collapse of the Agreement in 1971, gold began to float freely on the market. That causes prices to skyrocket, leading to inflation and political instability. After a long period of stagnation, gold prices began to rise rapidly again in the 2000s. Upheavals in politics and the financial world both contributed to gold’s prolonged rise in prices. After a mixed performance in the first half of the 2010s, gold has finally resumed its uptrend amid bottoming interest rates.
What can affect the price of XAUUSD?
Due to the constant changes in the market, politics… so the price of XAUUSD will be affected extremely strongly. Below are some important factors that make trading XAUUSD more difficult for traders, including:
- Monetary policy and speeches of the US Federal Reserve (FED). Because this is the agency that has the right to set or adjust world monetary policies.
- Economic data such as employment reports, production data… of the United States. If the economy grows strongly, the FED can tighten monetary policy (increase interest rates), causing a direct impact on gold prices.
- The large difference in supply and demand also causes gold prices to fluctuate erratically. For example, increased demand when supply is limited makes the XAUUSD price trend higher and vice versa.
- Economic, political, or inflationary crises can also affect XAUUSD Trading activities.
- The movement of the US Dollar is a strong factor influencing XAUUSD Investing. Because when the USD drops, it tends to push gold prices higher.
- The actions of electronLearn Forex Trading fund organizations and ETF funds also have a small impact on gold prices.
What to keep in mind when Trading XAUUSD
To grasp the trend of gold as well as invest in Trading XAUUSD effectively. Traders should clearly understand important notes such as:
- Review exchange rates to find ideal XAUUSD Trading opportunities.
- Proceed with XAUUSD purchases with caution. Because gold is an asset it is difficult to see fluctuations in a short period.
- It is not strange to use leverage when the XAUUSD trend goes in the opposite direction.
- XAUUSD price trends often go against other Forex currency pairs. Therefore, traders should diversify their portfolios to minimize risk to the lowest level.
- Patience is required when trading XAUUSD because gold’s trend changes are relatively mild.
What is the ideal time to trade XAUUSD?
Instead of having to constantly monitor the market to trade XAUUSD. Why don’t you update and find out what is the ideal time frame for XAUUSD Investing? According to market analysis, there is a period when both sessions will open at the same time (US time). Starting from 14:00 – 15:00 (Tokyo and London sessions overlap) and from 20:00 – 23:00 (London and New York sessions) overlap. At that time, the best time to trade is when the London and New York markets operate together. Specifically:
- The best time to trade XAUUSD during the day is from 19:00 – 2:00 (GMT +7). However, the time of greatest fluctuation is from 20:00 – 23:00 (GMT +7).
- The best times for XAUUSD Investing during the week are Tuesday, Wednesday, Thursday, and the first half of Friday. Because the first part of Monday morning is when the market is quiet. In the second half of Friday, traders will usually exit their orders and prepare for the weekend.
Trading models to anticipate the current popular XAUUSD trend
If you are planning to participate in Trading XAUUSD. Let’s refer to some gold trading models that help stay ahead of the trend that is commonly used today. Including:
- Turtle pattern in XAUUSD trading.
- Bat pattern in gold trading with the US Dollar.
- Trading strategy with DynamICMarkets combines trading in dispute zones.
- Buyer – Seller model (Buyer – Seller) and Client Positions (customer positions).
- Trading XAUSD with moving averages SMA20 and SMA16.
- Trade XAUUSD by market price segment.
See more: Opening and verifying an ICMarkets account
Effective XAUUSD trading experience for newbies
After a period of exploration and research, experts have drawn on XAUUSD trading experiences for traders. You just need to apply the following principles, which will increase your winning percentage for your XAUUSD trading:
- You must choose and implement the most suitable trading strategies for yourself.
- Traders should take time to learn and collect information about the market, economics, and politics. Because this is a useful source for setting up your trades.
- Take full advantage of the functions of pending orders when investing in gold. At the same time, apply the Stop Loss order to cut losses promptly and avoid being out of pocket.
- Persistently follow the proposed strategies and do not let emotions influence trading activities.
summary
Above is all the information about trading XAUUSD that we provide to you. Hopefully, this article will bring you the most effective XAUUSD transactions. Finally, I wish you success and regularly monitor Learn Forex Trading to update more useful knowledge.
FAQs:
What is trading XAUUSD in the foreign exchange market?
Trading XAUUSD is an investment activity between the gold asset class and the USD currency.
What factors influence the price of XAUUSD?
XAUUSD price is affected by many factors: market fluctuations, politics, global economic situation…
What popular XAUUSD Trading strategies are there?
You can apply strategies such as: following trends, applying MA indicators, placing Stop Loss, Take Profit orders… to manage risks when XAUUSD Investing.
