Been trading gold for a while now and wanted to share my approach using supply and demand zones. This has probably been the single biggest improvement to my gold trading.
Quick version of my process:
Quick version of my process:
- Mark the zone — I look for areas where gold made a strong move (at least $15-20 in a few candles). The consolidation before that move is my zone. I mark it from the wick low to the body close.
- Wait for price to return — This is the hardest part. You have to be patient. I only look for entries when price actually comes back to the zone.
- Confirmation candle — I never enter blind at the zone. I wait for a bullish/bearish engulfing or pin bar right at the zone boundary. Only then do I enter with a stop just beyond the zone.
Key things I've learned:
- Fresh zones (never tested) are WAY stronger than zones price has already bounced from
- Gold respects H4 and D1 zones better than lower timeframes
- News events can blow right through zones — I avoid trading zones during NFP/FOMC
- The bigger the initial move from the zone, the stronger it tends to hold
Found a good breakdown of this approach with chart examples — there's a supply demand oscillator that actually marks these zones automatically on MT4. Got it from ForexCracked's indicator library if anyone wants to check it out.
Anyone else using supply/demand for gold? What timeframe works best for you?
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