Even if you open an account with an FX company, there are a certain number of people who do not trade using scalping methods in foreign exchange and gold. Gold trading and other such products tend to be popular with trend followers because of their high price volatility. However, you need to be careful when scalping.
What is XAUUSD?
XAUUSD is gold. However, as you can see from the word USD, the price of gold is displayed in US dollars. As it is said to be emergency money, when the world situation becomes unstable, gold becomes easy to buy anyway. People have long tended to buy gold when anxious, and that hasn’t changed. By trading with high leverage, you can make a profit even with a small amount of money.
Features of XAUUSD Price Movement
Gold price movements often result in huge losses for traders who are accustomed to foreign exchange markets. This is due to the following reasons. It is dangerous to enter at important times such as when economic indicators are present. If you are trading, please read the information below and be careful. Use indicators and other tools on charts to increase your win rate. Use technical analysis to check for good points and take advantage of the opportunity. Hold a position with a safe lot setting. Aim for a rebound at the support line, whether short-term or long-term.
high liquidity
XAUUSD price movement is known for its high liquidity. Popular currency pairs in the exchange market, such as USD/JPY and EUR/USD, do not often move 100 pips. However, XAUUSD tends to be more volatile than forex, as it often moves more than 1000 pips per day. Note that the higher the price movement, the higher the profit, but also the higher the loss.
Risk-off phase
XAUUSD has the characteristic that it is bought in the risk-off scene and the rate rises. Risk-off means the behavior of investors to avoid risks, and it is the behavior that occurs when anxiety spreads due to political instability and sudden economic fluctuations. Money is what people invest in at a time like this. This happens whenever recession risk rises.
Inversely correlated with the US dollar
Since XAUUSD involves the US dollar, it is affected by the US economy. When the US dollar rises, XAUUSD falls, and when the US dollar falls, XAUUSD rises. Therefore, it is important to pay attention to the economic indicators of the United States in particular. In particular, policy interest rates and unemployment rates have a considerable impact.
Gold scalping is dangerous
There are many traders who do scalping, but it is said that gold trading is very dangerous. The following is often said in particular. The basic trick is to win and settle in a short time. Professionals can easily settle and take profits if they have even a small amount of unrealized profit, but at first they may be slow to decide to hold and worry about when to settle, which can result in a big loss. Look at the 5-minute chart, etc., and watch the moving average line while making the most of your margin to trade. Of course, you should also consider stop loss.
high volatility
A characteristic of gold is its high volatility. This is often the case that once a trend occurs, the flow does not stop. It is also a recommended market for trend followers, but if it goes backwards, you will lose a lot if you do not cut your losses immediately. There are times when it moves more than 200 pips in a day, so it is dangerous for those who can not properly cut losses.
Possibility of breaking even in a range market
In scalping, if you sell at the highest price in the range market and buy at the lowest price, you can win most of the time, but when the range starts to break and the price movement becomes rough, a trend usually occurs. At this time, there is a high possibility that it will break, so it is dangerous if you do not stop scalping and change your strategy. It is better to follow the trend with swing trading.
currency pairs for scalping
As mentioned above, gold tends to fluctuate more wildly than the foreign exchange market, so if you make a mistake in the timing of your bet, you will lose forever. To prevent this, it is better to change the market. Scalping is not very suitable for gold. You can earn money by watching the 1-minute chart on your smartphone, so it can be said to be a pair that can be used for buying and selling. By repeating multiple times, you can earn a good income at the optimal level. Make good use of the basic functions 24 hours a day to increase your assets. If you do it a lot, you will gain skill and feel at ease.
USD/JPY
The dollar yen is a very stable currency pair and is also a currency pair recommended for scalping. Liquidity has been quite high since the second half of 2021, but there is no doubt that it will still be overwhelmingly stable compared to other currency pairs. In addition, the spread of the dollar yen is narrow, so it is suitable for scalping.
EUR/USD
The EURUSD is the most traded currency pair in the world. For that reason, if you try to cause a one-sided movement, a reaction will work, so there will always be a supporting movement. Therefore, scalping is also highly recommended for EURUSD. The price movements are very stable, so you won’t lose a lot, and the spread is very narrow.
GBP/USD
The pound-dollar is more volatile than the euro-dollar, so it is a currency pair for intermediate cars rather than beginners. It is attractive that the spread is very narrow, but compared to the above two, it tends to be rougher, so it is recommended to get used to it to some extent.
HFM recommended
XAUUSD is also available for investment through HFM. Not only that, it also handles stocks, foreign exchange, and virtual currencies, so it is highly recommended. You can open an account for free, so please refer to the following article. There are always many stocks to choose from, so you can always increase your profits and losses.
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