For new and inexperienced traders, seeing the harsh sell off this morning on Gold would probably have put their minds set on going short. But for the more experienced and knowledgable traders out there, this is a great time to go long on Gold.
Gold is a safe haven asset that investors turn to when they feel their money is not safe, they buy gold as a secure long term asset so that their wealth is protected. Under times of serious distress, such as the pandemic we have been suffering, Gold prices tend to soar for the reason explained above. Also, Gold prices tend to rise as the value of the US Dollar falls. If everyone is buying gold, demand is increasing, therefore prices rise - don't get caught out on the other side!
Combining these fundamental factors, you would be stupid to ever sell gold in these current economic conditions - unless of course you are an expert short seller in counter trend trading.
So, why have I entered long here? Purely for the fact I personally believe we will see Gold prices continue to rise for the rest of the year as there is no likelihood we will escape this economic crisis caused by corona virus in the near future. When I saw those huge red candles, I could not stop smiling because we know we have a really nice play at hand. I wanted to enter earlier, but I have just checked the markets as I am currently a full time employee and cannot check my charts constantly.
A tip for the newbies here, currently with Gold, be very excited when you see harsh sells offs. Just don't enter straight away, or on a hunch that 'its dropped and will rise now'. You need confirmation first. So, watch your charts carefully and wait for signs of sellers getting exhausted, such as a pin bar or smaller red candles, and then confirmation that buyers have entered such as a strong bullish candle or an engulfing candle. I have set my TP to this level but in reality I dont think I will cash out, I will keep adding and holding to my position for the rest of the year.
If we are stopped out, we are stopped out. I wont enter short, but look for another opportunity to buy.
Happy trading everyone!
Gold is a safe haven asset that investors turn to when they feel their money is not safe, they buy gold as a secure long term asset so that their wealth is protected. Under times of serious distress, such as the pandemic we have been suffering, Gold prices tend to soar for the reason explained above. Also, Gold prices tend to rise as the value of the US Dollar falls. If everyone is buying gold, demand is increasing, therefore prices rise - don't get caught out on the other side!
Combining these fundamental factors, you would be stupid to ever sell gold in these current economic conditions - unless of course you are an expert short seller in counter trend trading.
So, why have I entered long here? Purely for the fact I personally believe we will see Gold prices continue to rise for the rest of the year as there is no likelihood we will escape this economic crisis caused by corona virus in the near future. When I saw those huge red candles, I could not stop smiling because we know we have a really nice play at hand. I wanted to enter earlier, but I have just checked the markets as I am currently a full time employee and cannot check my charts constantly.
A tip for the newbies here, currently with Gold, be very excited when you see harsh sells offs. Just don't enter straight away, or on a hunch that 'its dropped and will rise now'. You need confirmation first. So, watch your charts carefully and wait for signs of sellers getting exhausted, such as a pin bar or smaller red candles, and then confirmation that buyers have entered such as a strong bullish candle or an engulfing candle. I have set my TP to this level but in reality I dont think I will cash out, I will keep adding and holding to my position for the rest of the year.
If we are stopped out, we are stopped out. I wont enter short, but look for another opportunity to buy.
Happy trading everyone!