In the International Financial Market, investing XAUUSD is highly sensitive to real-time information. Under the background of mixed Bull & Bear information, how readers should deal with the volatile market, we will be discussing below.
Contents
Preface
As previously mentioned, the International Financial Markets are usually sensitive to real-time information. Let’s take the Fed’s easing monetary policy as an example; In the context of the Fed’s purchase of investment-grade corporate bonds to support the U.S. credit market, because the Fed is the last big buyer, many companies can recklessly issue cheap bonds to repurchase stocks and pay dividends, causing many companies’ stock prices to fluctuate vastly, yet lured Investors with preference on U.S. Stock Market. As consequence, the urgent necessity in USD would easily been eased, and providing XAUUSD to gain the availability in rebound. On the other hand, as Covid-19 emerged, nations around the globe required to fundraise on USD in order to conduct all sorts of support plans and/or vaccine procurement. Therefore, the global demand of collecting USD still has a certain degree of support, causing the price on USD to remain volatile. While Surges in USD occurred would limits the room for XAUUSD to rise.
The aforementioned events are designed to simulate when XAUUSD is in the background of combinations in both Bull & Bear news, and how can readers face and respond to the swaying market, the price chart in next pages will be used to deduce.
Demonstration of Volatile Market In XAUUSD
Chart Interpretation
First of all, let’s learn how to study and judge whether the day may be vacillating by a simple method. There are two hints that must be paid attention to.
(1) Whether the quotation is between the average line of the long and short period
(2) Whether the quotation is hovering and entangled above any moving average
Meaning Behind
According to the last slide, if one of the elements were met, it usually implies the recent investor’s transaction cost were relatively close to the final price. At this time, if there is a new buyers or sellers that wishes to join, then the price trend would most likely to be inseparable from this range. On the other hand, it also indicated that the long and short sides have very different views on the price trend. Therefore, from the rule of thumb, the probability of the XAUUSD to fluctuate on that day would be increased.
Transaction strategy
If the experienced investors come to the conclusion that the market on the day hold a high probability of volatility, they usually take the following actions:
(1) Observing the candlestick and record the intraday high and low points and the scope, check the economic calendar of the day for important economic indicators or events that are about to occur, and wait for the market to start.
(2) Zooms the candlestick chart to a range within 15 minutes, and switch to operating scalping transaction.
(3) Closes existing orders to detach from the congestion realm.
Comparison of Countermeasures
There were three trading strategies derived from the briefing on the previous page,and these method could not just differentiate from which is superior or which is inferior, instead, each has its own Pros and Cons.
(1) The method of staying on the sidelines and waiting for opportunities is easier for investors who holds sufficient time to keep eyes on the market all the time. If successfully manage to grasp the moment when the quotation leaves the congestion region, they will usually make good profits. However, the disadvantage is the uncertain waiting time, the menacing for attack would required great portion of patient and could be exhausted without any return.
(2) Converting the candlestick chart for very short-term(Scalping) trading. This method is usually more commonly used by professional investors or traders. Based on their own trading experience, long and short dual trading frequently conduct in and out of struggle making relatively lower profit. The disadvantage is that there may be controllable to hold less profit and less loss, and the worst may be resulted with small losses.
(3) Closing position(s) holding and leave the congestion area to prevent risking to be dragged by the congested market. The disadvantage is that if the market breaks out of the obstacle you will have to wait for the next opportunity or take the risk to enter afterward.
Epilogue
According to the brief introduction on the previous page, investors don’t have to be frustrated when XAUUSD enters the congestion region. Perhaps some people think they can spare more time for living, and some investors see congestion as an opportunity to make a fortune. This is precisely because of the investment in XAUUSD have always had many possibilities, and it does worth our effort to earn it. After all, opportunities are often seized by people who are ready.
See more:
Prior To Conducting XAUUSD(Gold) Trade
Five Factors Effectively Determine The Trend Of Gold Prices
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