Step 1: Determine the Market Trend
To enter the markets, the first step is to determine the market trend. Trend traders prefer to buy during an uptrend and sell during a downtrend. An uptrend does not always have to have buy orders and wise verse. A trade may require extra attention and should be taken against the trend because the trend may reverse or change from pointed levels. These point levels can be predicted using other analysis in the price actions and cycles section. Having to take a trade within the trend generates a strong gold technical signal, whereas trading against the trend generates a weak signal and may result in a defined risk.
Step 2: Determine the Market Phase
Following the identification of the trend, it is necessary to determine the market phase in which the market is trading. Buying should be considered with a reasonable amount of risk if the market is in the accumulation or distribution phase. However, if the market is in an overbought or panicked state, trading should be avoided or approached with extreme caution.
Step 3: Determine the Critical Levels
The third step is to consider the critical levels where supports and resistance may exist. During panic or excess phase, short-term supports and resistance are unreliable. But there is an entirely different theory about how to identify supports and resistance. Supports and Resistance can be classified into different categories and have different meanings. During the turning time, if gold reaches the intersection of short and medium term supports, it usually provides the best entry for Gold and Silver Trading.
Step 4: Determine the Volatility
The fourth step involves calculating the level of volatility in gold and silver, as well as other forex markets that influence gold prices. The volatility indicator is a good approximation of the golden entry and exit points. Measurement of volatility is important step for gold technical analysis.
Step 5: Trade Decision & Execution
After considering all of these factors, we arrive at a conclusion about the gold technical analysis. These functional studies show where gold and silver will go in the future. When it comes to entering and exiting the market, technical analysis isn’t always the best strategy. And it is for this reason that approximately 95% of traders lose money in the financial market. Trading is a skill that requires patience and discipline. And we believe that following one system or multiple systems or indicators to enter and exit will always result in a loss over time. Someone may be optimistic in the short term, but this is not the way to invest for the long term. To put legs into the markets, we need to consider different trading tools and add different analysis to filter out the various noises in the study.